Monday morning the government braced for austerity, as the government understands that. Having sent Congress a $3.5 trillion budget, the president signaled in advance -- perhaps so his Cabinet members could steel themselves for the new asceticism -- that at the first meeting of his Cabinet he would direct the 15 heads of departments to find economies totaling $100 million, which is about 13 minutes of federal spending, and 0.0029 percent -- about a quarter of one-hundredth of 1 percent -- of $3.5 trillion.

If the Agriculture Department sliced the entire $100 million, that would be equal to 0.1 percent of its fiscal 2008 budget. The president, peering from beneath his green eyeshade at the secretary of agriculture, might remember this from The Post of Jan. 24:

"Agriculture Secretary Tom Vilsack . . . learned that his new workplace contains a post office, fitness centers, cafeterias and 6,900 employees. But he remained uncertain about exactly how many employees he supervises nationwide. 'I asked how many employees work at USDA, and nobody really knows,' he said."

The president's $100 million edict actually suggests an insufficiency in the river of federal assistance flowing out of Washington to the deserving poor, as that category is currently understood: incompetent car companies, reckless insurance companies, mismanaged banks, profligate state governments, etc. But political satirists, too, deserve a bailout from a federal government that has turned their material into public policy.

The president has set an example for his Cabinet. He has ladled a trillion or so dollars ("or so" is today's shorthand for "give or take a few hundreds of billions") hither and yon, but while ladling he has, or thinks he has, saved about $15 million by killing, or trying to kill, a tiny program that this year is enabling about 1,715 D.C. children (90 percent black, 9 percent Hispanic) to escape from the District's failing public schools and enroll in private schools.

The District's mayor and school superintendent support the program. But the president has vowed to kill programs that "don't work." He has looked high and low and -- lo and behold -- has found one. By uncanny coincidence, it is detested by the teachers unions that gave approximately four times $15 million to Democratic candidates and liberal causes last year.

Not content with seeing the program set to die after the 2009-10 school year, Education Secretary Arne Duncan (former head of Chicago's school system, which never enrolled an Obama child) gratuitously dashed even the limited hopes of another 200 children and their parents. Duncan, who has sensibly chosen to live with his wife and two children in Virginia rather than in the District, rescinded the scholarships already awarded to those children for the final year of the program, beginning in September. He was, you understand, thinking only of the children and their parents: He would spare them the turmoil of being forced by, well, Duncan and other Democrats to return to terrible public schools after a tantalizing one-year taste of something better. Call that compassionate liberalism.

After Congress debated the program, the Education Department released -- on a Friday afternoon, a news cemetery -- a congressionally mandated study showing that, measured by student improvement and parental satisfaction, the District's program works. The department could not suppress the Heritage Foundation's report that 38 percent of members of Congress sent or are sending their children to private schools.

The Senate voted 58 to 39 to kill the program. Heritage reports that if the senators who have exercised their ability to choose private schools had voted to continue the program that allows less-privileged parents to make that choice for their children, the program would have been preserved.

As the president and his party's legislators are forcing minority children back into public schools, the doors of which would never be darkened by the president's or legislators' children, remember this: We have seen a version of this shabby act before. One reason conservatism came to power in the 1980s was that in the 1970s liberals advertised their hypocrisy by supporting forced busing of other people's children to schools the liberals' children did not attend.

This issue will be back. In a few months, the appropriation bill for the District will come to the floor of the House of Representatives, at which point there will be a furious fight for the children's interests. Then we will learn whether the president and his congressional allies are capable of embarrassment. On the evidence so far, they are not.

Barack Obama and the CIA: why does President Pantywaist hate America so badly?Posted By: Gerald Warner at Apr 24, 2009 at 18:41:00 [General]

If al-Qaeda, the Taliban and the rest of the Looney Tunes brigade want to kick America to death, they had better move in quickly and grab a piece of the action before Barack Obama finishes the job himself. Never in the history of the United States has a president worked so actively against the interests of his own people - not even Jimmy Carter.

Obama's problem is that he does not know who the enemy is. To him, the enemy does not squat in caves in Waziristan, clutching automatic weapons and reciting the more militant verses from the Koran: instead, it sits around at tea parties in Kentucky quoting from the US Constitution. Obama is not at war with terrorists, but with his Republican fellow citizens. He has never abandoned the campaign trail.

That is why he opened Pandora's Box by publishing the Justice Department's legal opinions on waterboarding and other hardline interrogation techniques. He cynically subordinated the national interest to his partisan desire to embarrass the Republicans. Then he had to rush to Langley, Virginia to try to reassure a demoralised CIA that had just discovered the President of the United States was an even more formidable foe than al-Qaeda.

"Don't be discouraged by what's happened the last few weeks," he told intelligence officers. Is he kidding? Thanks to him, al-Qaeda knows the private interrogation techniques available to the US intelligence agencies and can train its operatives to withstand them - or would do so, if they had not already been outlawed.

So, next time a senior al-Qaeda hood is captured, all the CIA can do is ask him nicely if he would care to reveal when a major population centre is due to be hit by a terror spectacular, or which American city is about to be irradiated by a dirty bomb. Your view of this situation will be dictated by one simple criterion: whether or not you watched the people jumping from the twin towers.

Obama promised his CIA audience that nobody would be prosecuted for past actions. That has already been contradicted by leftist groups with a revanchist ambition to put Republicans, headed if possible by Condoleezza Rice, in the dock. Talk about playing party politics with national security. Martin Scheinin, the United Nations special investigator for human rights, claims that senior figures, including former vice president Dick Cheney, could face prosecution overseas. Ponder that - once you have got over the difficulty of locating the United Nations and human rights within the same dimension.

President Pantywaist Obama should have thought twice before sitting down to play poker with Dick Cheney. The former vice president believes documents have been selectively published and that releasing more will prove how effective the interrogation techniques were. Under Dubya's administration, there was no further atrocity on American soil after 9/11.

President Pantywaist's recent world tour, cosying up to all the bad guys, excited the ambitions of America's enemies. Here, they realised, is a sucker they can really take to the cleaners. His only enemies are fellow Americans. Which prompts the question: why does President Pantywaist hate America so badly?

Ok, this is not racist. BO is different from all the previous "white" presidents because he is "hip".

Is this code for, "he is black enough"? I don't know.

Well, if 6'4" Abe played, if there was a basketball in his day, he would have kicked BO's ass in B ball.

***For Obama, hipness is what it is

Sam Fulwood III Sam Fulwood Iii – Fri Apr 24, 5:06 am ETDuring his first 100 days as president of the United States, Barack Obama revealed how different he is from all the white men who preceded him in the Oval Office, and the differences run deeper — in substance and style — than the color of his skin.

Barack Hussein Obama is the nation’s first hip president.

This, of course, is subject to debate. But watch him walk. Listen to him talk. See the body language, the expressions, the clothes. He’s got attitude, rhythm, a sense of humor, contemporary tastes.

This much is clear: Whether dealing with the Wall Street mess, shifting troops from Iraq to Afghanistan or fumbling to fill his Cabinet, Obama leans heavily on personal panache to push political policies. Truth be told, his style is rooted in something elusive and hard to define. Pure and simple, it’s hip.

“Being hip is being able to navigate your environment and others’ environments,” like the way Obama traverses racial boundaries, said John Leland, author of the definitive book “Hip: The History.”

“Obama has this awareness that other presidents haven’t had. He’s white, and he’s black. He’s an elitist, and he’s regular folk. He’s not pinned down to a perspective.”

Young is to hip as old is to fogey — an essential characteristic. Obama has modern instincts and attitudes that appeal to younger people, and more than any other president in recent memory, that makes him a role model. He is green, open, athletic, tech-savvy, healthy. And his hip image certainly isn’t hurt by his wife, who is so obviously cool — setting trends (Sleeveless! Tending her own garden!), confidently mingling with superstars, gracing magazine covers coast to coast.

Consider how, during the campaign, Obama used his personality — the smile, the jaunty stride and the hip-hop verbiage — to disarm critics, charm supporters and persuade fence sitters to elect him president. In an against-the-odds campaign, Obama never lost his poise as he forged a rapport with a new generation of voters while keeping old heads on his team. He could go professorial on the need for health care reform or describe the minutiae of Middle East politics. Still, he begged to bring his BlackBerry into the Oval Office, a signal that he intends to remain in touch with the 21st century. Very hip!

Once he settled into the White House, the hip parade didn’t subside. Early guests included pop artists Stevie Wonder (a campaign supporter), Alicia Keys, Will.i.am and Sheryl Crow — but also Sweet Honey in the Rock, a group of socially and politically active a capella singers with an indie, underground vibe.

Obama strutted onto Jay Leno’s stage and plopped down on the couch, making him the first sitting president to do that. He unveiled his March Madness basketball bracket from the Oval Office. And speaking of basketball, who missed the sight of POTUS dressed in all black, sitting courtside at a Bulls-Wizards game with a cup of beer and high-fiving a trash-talking fan? How hip was that?!

It’s so hip that school kids in Albany, N.Y., coined a term for it: “Baracking.” And it doesn’t stop there. Those in the know at Albany High greet each other by saying: “What’s up, my Obama?” and they respond to a sneeze with “Barack you.” Misbehavior is peer-corrected with the admonition, “Barack’s in the White House,” which translates, “Show some respect.”

Deborah Tannen, professor of linguistics at Georgetown University, said it was “just really stunning” that kids were co-opting the president’s name as a term of endearment and identification.

“This is the most emblematic, positive thing that kids could say,” she said. “It’s connecting them to him, saying that there’s something special in the connection between them.”

John F. Kennedy understood the nexus of Hollywood glam and Washington power, but he wasn’t a hipster. Bill Clinton looked good in Ray-Bans and did a nice turn with the saxophone on “The Arsenio Hall Show,” but in his heart of hearts, Ol’ Bubba was a country boy from the Ozarks with a need-filled, wonky core — not hip.

Obama’s hipness reinforces that he’s different, yet he’s comfortingly familiar to Americans who want to revere their presidents as pedestal material while demanding that they be approachable as the guy next door.

So what’s hipness got to do with public policy? For Obama, everything.

His personal charisma is a nonverbal form of communication, sending seemingly conflicting messages: the need for radical and sacrificial change, yet the reassurance to Americans that he’s as sane and stable as the guy in the next barber’s chair, said Roger Wilkins, who recently retired as a history professor at George Mason University.

“Hipness is a way of presenting to the world that you know what’s going on and that you’ve got things under control,” said Wilkins, who served in the Johnson administration and has had up-close dealings with every president since Kennedy.

“For Obama, his hipness exudes power. He just keeps on moving, no matter what comes his way, and he doesn’t lose it. That’s being hip — and I don’t see any contemporary public figures whom I would think of as hip.”

True, Obama uses his hipster personality as a weapon. His enormous popularity is a bludgeon that demands political respect, if not support. For example, almost immediately after settling into the White House, Obama left Washington to campaign in Ohio, Michigan and other hard-hit states to sell his economic stimulus plan. It was an effective effort at charm-school diplomacy, garnering outside-the-Beltway support and applying pressure on Washington insiders to get on board the Obama train.

The implication was that if you were not on board, you were not hip — you were square. And who wants to be so uncool as to be on the wrong side of the hip president, other than a few vocal anti-cools, such as radio yakker Rush Limbaugh, House Minority Leader John A. Boehner and former Vice President Dick Cheney?

There have been a few other nationally recognized hip politicians: the late Rep. Adam Clayton Powell of New York; former California Gov. Jerry Brown, who is currently the state’s attorney general; and former San Francisco Mayor Willie Brown come to mind. For a brief period in the 1970s and 1980s, one might argue that Washington’s eternal pol Marion Barry was hip; that was before drugs, booze and women brought him low.

To be sure, the track record for hip politicians isn’t promising. History suggests that the power of personality has limitations in politics. It sours under public scrutiny.

So can it last? Can Obama’s hipness survive the weight and responsibility of the office? Maybe there’s a reason presidents aren’t hip. War-making, secrecy, aging, unpopularity, sternness and sobriety — these are decidedly unhip. And all that could come in the next 100 days, because hipness is a trendy thing, subject to popular whim.

For now, with approval ratings over 60 percent, Obama is hip. But he will have to find a balance between being hip and being powerful while sitting in the world’s most watched fishbowl.

“Hipness is what it is! And sometimes hipness is what it ain’t,” goes the famous song by Tower of Power. “There’s one thing you should know. What’s hip today might become passé.”

Sam Fulwood III wrote about race and politics for the Los Angeles Times’ Washington bureau for more than a decade and is a frequent contributor to The Root.com.***

By SUZANNE SATALINE, JONATHAN D. ROCKOFF and CHRISTOPHER CONKEYAs secret missions go, this one was a flop.

On Monday morning, one of the 747s used to ferry around the U.S. president was dispatched to the Statue of Liberty, escorted by a fighter jet. Assignment: Get some fresh glamour shots of the plane.

The Air Force said the flight needed to remain confidential. So while New York police knew about it, as did at least one person in the mayor's office, regular New Yorkers remained in the dark.

As a result, to onlookers Monday all across downtown Manhattan -- where the World Trade Center once stood -- the photo shoot looked like a terrorist attack. People watched in horror as a massive aircraft, trailed closely by an F-16 fighter jet, banked and roared low near the city, in a frightening echo of the events of Sept. 11, 2001.

Fearing the worst, thousands of people streamed out of the skyscrapers and into the streets. Some buildings ordered evacuations. "Oh God, it was mayhem in here, just mayhem," says Rubin Shimon, manager of Styling Haircutters, a barbershop near Ground Zero. Many people took shelter in the shop to call loved ones on their cellphones.

It was all over in a half-hour or so. Then the finger-pointing began. "I'm annoyed -- furious is a better word -- that I wasn't told," said New York Mayor Michael Bloomberg at a news conference. He'd been scheduled to talk about a swine-flu outbreak at a Queens school, but also sounded off at the federal government for its "badly conceived" flyover plan.

He chastised his own office for its role in keeping the flyover secret. On Thursday night, city officials say, a junior mayoral aide had been alerted to the flyover by the Federal Aviation Administration, which requested that it be kept secret. Someone in City Hall alerted the New York Police Department, but no public announcement was made.

Marc Mugnos was reprimanded for not apprising the mayor, and a disciplinary letter was placed in his file, a spokesman said. Mr. Mugnos couldn't be reached for comment.

Low-Flying Plane Causes Scare in Manhattan1:44A low-flying airplane escorted by military jets sent worried workers fleeing offices in the New York City area. The FAA said it was a "photo op" conducted by a unit of the Air Force.The email sent to City Hall describes a "flying photo op" -- government-speak for a publicity photo -- to include two or possibly three passes over the area. The email, sent by an FAA official and reviewed by The Wall Street Journal, lists flight patterns and specifies a photo-op altitude of 1,000 to 1,500 feet.

The email specifies that the information "only be shared with persons with a need to know" and "shall not be released to the public." It also says that, "Due to the possibility of public concern regarding [Department of Defense] aircraft flying at low levels, coordination with Federal, State and Local law enforcement agencies...has been accomplished."

The email's author, James J. Johnston, of FAA air traffic, declined to comment.

An Obama administration official said the mission was "classified" by the military and that the FAA, which controls much of the airspace over Manhattan, did what the military asked. "The mission was to send [the aircraft] up to get a picture of it flying around the Statue of Liberty," this person said. "They said they needed to update their photo files." President Obama wasn't aboard.

MoreVote: How does the Air Force One "photo op" affect your confidence in White House decision making?Wash Wire: Caldera Takes BlamePlane Scare Has Happened BeforeReaders' reactions: Plane 'Flying VERY Low'Readers' Photos: Jets Circle N.Y.Send photos to yourphotos@wsj.comThe New York photo shoot wasn't the only one planned. The White House had scheduled a follow-up session on May 5 or May 6 in Washington, D.C., according to two government officials. The D.C. flyover has now been canceled, a government official said.

Louis Caldera, a former Secretary of the Army who runs the White House Military Office, took the blame. "While federal authorities took the proper steps to notify state and local authorities in New York and New Jersey, it's clear that the mission created confusion and disruption," he said. "I apologize and take responsibility for any distress that flight caused."

It was a beautiful spring day in the Big Apple -- perfect for picture taking. The aircraft, painted in White House livery, was trailed by one F-16 fighter jet. The aircraft had flown from Andrews Air Force Base in Maryland, across New Jersey, down the Hudson River and then circled the Statue of Liberty before heading off.

For many who witnessed the maneuver, it stirred dark memories. Andrew Wybolt, who works for Barclays PLC in a skyscraper that borders the Hudson, said people rushed for the windows when they heard the planes. "They just started sprinting and freaking out," he said.

Associated PressLouis Caldera, pictured in 2006, took blame for the flight.Thousands of workers from Merrill Lynch, American Express and other companies in the buildings that ring the former World Trade Center site hustled for the exits. Many stood outside their offices, nervously looking up into the sky, while hundreds of others walked north, along the West Side Highway, as thousands of people had done the morning of Sept. 11, 2001.

"To do something like this to all these people who have already been through 9-11 is just wrong," said Greg Forman, a broker at the New York Mercantile Exchange, which is located in a building along the Hudson river, across the street from the World Trade Center site.

One block north, construction workers on the 43-story Goldman Sachs Group Inc. tower said they had a close-up view of the low-flying plane. "I saw that thing coming and ran down the stairs," said Eddie Navedo, who was clearing construction debris on the 23rd floor of the new building when he spotted the plane flying low over the river, then banking sharply to the west. "Everybody was saying, it's a terrorist attack."

Not everyone lost his cool. Mr. Shimon, the manager of the barbershop where people fled on Monday, was present for the attacks in 2001, and in fact at that time worked in a shop even closer to the World Trade Center than his current one. He watched the towers fall that day.

So did the events of Monday scare him? "To tell you the truth, not really," Mr. Shimon said. "I didn't think it was such a big deal. I'm a New Yorker."

It's official: Barack Obama is the second most reviled newbie president of the last forty years. A gallup survey today published in the Washington Times shows Obama to have an approval rating of just 56 per cent. The only president to have performed worse than that at the end of his first 100 days in office was Bill Clinton - and only then because it happened to coincide with the spectacular mishandling of the Waco siege, which might reasonably be laid at the door of ATF and FBI incompetence rather than presidential negligence.

Barack Obama: Nice kids, cute dog, shame about the politics

Obama's low approval ratings, however, are all of his own making. He campaigned as a healing moderate who would take the US beyond partisan politics and restore the economy; instead he has terrified all those Americans who rightly abhor the idea of adopting European socialist, with the most sweeping advance of the progressive agenda and growth in the power of the state since the days of FDR's New Deal.

His cheerleaders in the mainstream media deny this is so. "Public thinks highly of Obama" was USA Today's unbiased response to the polls, while the editor of Newsweek has argued he always campaigned as a progressive.

But the Post argues otherwise: 'In all three presidential debates, Mr. Obama promised to cut government spending and reduce the size of the deficit. He blamed the economic crisis on excessive deficits. At no time did candidate Barack Obama say that more deficit-spending was the solution.'

Is Obama really worse than Carter or Nixon, though? To help readers make up their own minds and in the spirit of unity and Obama-style non-partisanship, I hereby offer a helpful pro and con guide to Obama: the First 100 Days.

CON:

1. Pantywaist, surrender-monkey, I-feel-your-pain, kowtowing to countries like Iran and Saudi Arabia means that America is no longer just hated in the Muslim world. Now, it is hated AND laughed at AND despised.

2. Swingeing green tax measures will destroy US industry, enrich Al Gore, delight Michael Moore while costing the average US family - in Cap and Trade alone - an extra $3,900 a year.

3. Returning Winston Churchill bust, snubbing British prime minister guarantees that never again will the United Kingdom ride the rescue of the US's sorry ass next time there's another Pearl Harbor.

4. Universal healthcare program will cost US taxpayers at least $650 billion (expect this to expand, like builders' estimates by at least 100 per cent), giving a health service to match Britain's "Envy of the World": ie crowded, filthy, chaotic wards; long waiting lists; lower cancer survival rates; higher death toll; ever-growing expense; a service so bad you'll pay anything in private health insurance to avoid using it...

5. Economy showing no signs of recovery. Why should it? Obama's doing nothing to make it better.

7. Proposed $2.4 TRILLION in new taxes will disincentivise even the most instinctively hard working Americans. Instead they will go on Atlas Shrugged style strike. Maybe they're right: it could be the only answer.

8. Galloping inflation caused by money printing. US to become next Zimbabwe, only without the elephants to poach and eat to stave off mass starvation.

9. Noises already made about "Right Wing Extremists" - ie war veterans, people with Ron Paul bumper stickers, anyone else who disagrees with any aspect of the progressive Obama program - suggests it won't be long before those 44 per cent (so far) of registered Obama-sceptics hear a midnight knock at the door.

10. Rules - lots and lots more oppressive, Euro-style nanny state style rules governing everything from how Americans dispose of their trash, to race relations to pet care to firearms ownership. It's for Society's good, you understand.

"Barack Obama is the second most reviled newbie president of the last forty years. A gallup survey today published in the Washington Times shows Obama to have an approval rating of just 56 per cent. The only president to have performed worse than that at the end of his first 100 days in office was Bill Clinton"

Is this stat true? Wow!

Listening to the main stream media one would think BO is the *most beloved* Pres of all time after the first 100 days!

From NBC's Harry EntenAs we approach President Obama's official 100th day in office, his approval rating in the Gallup poll is average compared with past American presidents -- or is it?

Going back to Eisenhower, Obama's 65% approval rating in the most recent daily Gallup poll is equal to the average Gallup approval for the 10 preceding presidents. Kennedy and Johnson had approval ratings in the low 80s at their 100-day mark. President Ford, in the wake of Watergate and the pardon of President Nixon, had the lowest approval rating at 48%.

But when we look only at presidents in the past 40 years, Obama is near the top. His approval is 7-10 points higher than the approvals of the last three presidents. Since Nixon, in fact, only Reagan's 68% is higher than Obama's current approval rating currently possessed by Obama.

PresidentsApproval %Eisenhower73%Kennedy83Johnson80Nixon62Ford48Carter63Reagan68H.W. Bush56Clinton55W. Bush57.565%Based on Gallup polls taken within five days of 100-day mark. Some ratings are averages of two polls taken in that period.

Obama response to flu threat: ask congress for 1 1/2 billion emergency funding. There wasn't enough cushion in the first 10 trillion passed so far to handle 50 people sick with the flu. I guessed wrong; I thought he would appoint a bipartisan commission to look into it.

I am doubtless doomed to perdition because I enjoy watching this pompous fool step on his weenie.

May 01, 2009Aren't you glad Sarah Palin isn't Vice President?Ethel C. FenigGosh, Tina Fey and other critics were absolutely correct; Sarah Palin is a lousy vice president because she lacks experience, has no understanding of the larger world and lacks gravitas.

As a result Janet Napolitano from the Department of Homeland Security and Senator Tom Harkin (D-Iowa) had to scold the vice president for irresponsible remarks regarding the swine flu outbreak while Obama's press secretary Robert Gibbs was forced t o interpret the remarks.

ABC News Political Punch has the quotes.

"I think the vice president if he had, if he could say that over again he would say if they're feeling sick they should stay off of public transit or confined spaces because that is indeed the advice that we're giving," Napolitano said on MSNBC.

"Well, I think that's a very unfortunate statement by the vice president. We just don't need that type of misinformation going out. I wish the vice president had checked with the center for disease control and preparedness before he made that statement," said Harkin. "As far as not riding on subways or planes, we're not going to shut down our system and that doesn't get to the nub of the problem anyway, so I think that's very unfortunate that this kind of misinformation got out."

TAPPER: Representatives of the travel industry have accused the vice president of coming close to fear mongering because of these comments. I'm wondering if you wanted to clarify or correct or apologize for the remarks that he made.

GIBBS: Well, I think the -- what the vice president meant to say was the same thing that, begun, many members have said in the last few days. And that is if you feel sick, if you are exhibiting symptoms -- flu-like symptoms, coughing sneezing, runny nose, that you should take precautions, that you should limit your travel, and I think he just -- what he said and what he meant to say.

TAPPER: With all due respect, I sympathize with you trying to explain the vice president's comments, but that's not even remotely close to what he said. He was asked about if a members of his family...

GIBBS: Look, I understand what he said, and I'm telling you what he meant to say, which was that... (LAUGHTER BY REPORTERS) ... if somebody is experiencing symptoms -- you heard the president say this last night -- if somebody is feeling sick, if somebody is exhibiting symptoms of being sick, then they should take all necessary precautions. Obviously, if anybody was unduly alarmed for whatever reason, we -- we would apologize for that. And I hope that my remarks and remarks of people at CDC and Secretary Napolitano have appropriately cleared up what he meant to say.

Oh? What's that you said? Sarah Palin isn't vice president but the oh so experienced, oh so worldly former Senator from the east coast state of Delaware who served in Washington DC for decades where he gained the necessary sophistication and gravitas is the vice president and is just a heartbeat away from the presidency.

Joe Biden was the first clue that Obama would have trouble assembling a competent team, also a clue that he (Obama) is all about politics (neutral Democratic political choice) and nothing about finding the best and the brightest for the country. Reuters says the administration is "clarifying" his remarks. The administration should be "clarifying" why Obama picked Biden to be a heart beat away in the first place.

Kerry and Gore were buffoons and Bush often appeared to be one, but Obama is top-of-the-class intelligent while Biden was a bottom-of-the-class flounderer before finding comfort in the Democrat party. The coalition that elected Obama includes a strange combination highly educated liberal whites along with an underclass of minorities; blacks in particular are very proud of Obama. I don't understand why either group feels any identification with the Obama-Biden ticket rather than just with Obama.

Hard to come up with an analogy, but if the conservative candidate was a scholar like Victor Davis Hanson and the VEEP was Daffy Duck, I would vote for the ticket but only buy the sticker that said 'Hanson', not 'Hanson and the Duck'.

I still remember Biden's howlers in his debate with Sarah Palin about Lebanon and Hezbollah-- from the man chosen for his int'l expertise to balance out His Glibness.

Anyway, , , here's this worrisome little item.

Soros Influenza

In other bad news from the Pentagon, "Democratic Party financier George Soros, who puts much of the blame for Islamic terrorists on America and former president George W. Bush, can celebrate his first foothold inside the Pentagon," writes columnist Rowan Scarborough. "It is in the person of Rosa Brooks, far-left former Los Angeles Times columnist." Brooks was also a lawyer for Soros' Open Societies Institute, which in turn is sugar daddy for MoveOn.org. She will now be "principal adviser" for Undersecretary of Defense Michele Flournoy, the Number 3 official and top policymaker at the Pentagon. This means that Brooks will have an influence on such things as budget, troop deployments and weapons purchases. She will also, according to the Pentagon, "develop cross-regional planning," which means she will hold sway over foreign relations.

In light of her coming role, her views on national security might be pertinent, and a look at Brooks' diatribes quickly reveals the problem. She compared President George W. Bush to Adolf Hitler (how original) and called Bush and Vice President Dick Cheney "psychotics who need treatment." Perhaps most telling is this passage from a 2007 article: "[Al Qaeda] was little more than an obscure group of extremist thugs, well financed and intermittently lethal but relatively limited in their global and regional political pull. On 9/11, they got lucky -- but despite the unexpected success of their attack on the U.S., they did not pose an imminent mortal threat to the nation. Today, things are different. Thanks to U.S. policies, al Qaeda has become the vast global threat the administration imagined it to be in 2001." Uh, thanks to U.S. policies Rosa, al-Qa'ida has not made a successful attack on U.S. soil since 2001.

Sadly, however, the fact that a DoD undersecretary now has a total wingnut as an advisor isn't exactly earth-shattering news given the radicalism threaded throughout this administration. Barack Obama still has at least 1,359 days left.

BO has been succesful at hiding from and fooling the majority of Americans into thinking he doesn't hate America and on his views that *America is the enemy* not the true enemies.

You know one almost has to start wondering if he works for our enemies.

He couldn't be a greater ally to them.

But the Cans still have no better alternative and most Americans are happy to go on the dole and be bought off apparantly - or so they think - until our taxes start to sky rocket. the taxes will be hidden as best as possible.

Rick MoranMan, when the White House plays hardball, they play it "The Chicago Way" - brass knuckles, groin kicks, and threats to destroy their adversaries.

And when confronted with allegations of their thuggery, instead of claiming their complete innocence, the administration practices another time honored "Chicago Way" custom and sneers "Prove it!"

Jack Tapper of ABC News - a guy who is turning into one of the few bulldog reporters on the White House beat - got this information from an attorney for one of the hedge funds involved in the Chrysler bankruptcy negotiations:

A leading bankruptcy attorney representing hedge funds and money managers told ABC News Saturday that Steve Rattner, the leader of the Obama administration's Auto Industry Task Force, threatened one of the firms, an investment bank, that if it continued to oppose the administration's Chrysler bankruptcy plan, the White House would use the White House press corps to destroy its reputation.

The White House said the story was false.

"The charge is completely untrue," said White House deputy press secretary Bill Burton, "and there's obviously no evidence to suggest that this happened in any way."

Thomas Lauria, Global Practice Head of the Financial Restructuring and Insolvency Group at White & Case, told ABC News that Rattner suggested to an official of the boutique investment bank Perella Weinberg Partners that officials of the Obama White House would embarrass the firm for opposing the Obama administration plan, which President Obama announced Thursday, and which requires creditors to accept roughly 29 cents on the dollar for an estimated $6.8 billion owed by Chrysler.

Lauria first told the story, without naming Rattner, to Frank Beckmann on Detroit's WJR-AM radio.

Perella Weinberg Partners,"was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House press corps would destroy its reputation if it continued to fight. That’s how hard it is to stand on this side of the fence," according to the attorney.

It turns out Perella's stake in Chrysler debt was small potatoes compared to big banks like JP Morgan, Citigroup, and Goldman. Do you think that the fact those banks got up to $100 billion in bail out money had anything to do with them embracing the administration's plan for Chrysler?

I think it also significant they sent out a deputy instead of Gibbs to deny the story. The crack about "obviously no evidence to suggest that this happened in any way," is typical "non-denial, denial for a president when they are caught doing something they shouldn't.

No doubt the White House press corps would eagerly do their master's bidding if told to destroy someone or some firm's reputation. At least most of them would. Jack Tapper of ABC just might be one of the last honest reporters in Washington which makes him extremely vulnerable. For the press, there is safety in the pack and Tapper taking on the role of Diogenes might be dealt with the same way that Mayor Daley of Chicago deals with reporters who displease him; the "Freeze-out" or "The Big Freeze." Tapper's sources in the WH, his access to high level administration officials, could disappear. Obama could conveniently forget to call on him at press conferences. Exclusive on camera interviews would be routinely denied.

In short, they might very well prevent Tapper from doing his job. But that's "The Chicago Way" and the White House is now in the hands of people who play that game with thuggish efficiency.

President Obama’s estimated $17 billion budget cuts for fiscal year 2010 amounts to a measly .5 percent of the president’s total proposed spending, and 1.5 percent of the president’s proposed deficit for the coming fiscal year. His offerings to cut the budget should be dismissed as unserious. In fact, this is reminiscent of the Bush administration’s annual list of minuscule proposed cuts in the face of profligate spending and mounting federal debt.

President Obama says his efforts “are just the next phase of a larger and longer effort needed to change how Washington does business and put our fiscal house in order.” Promising more spending and more debt while celebrating relatively insignificant cuts and ignoring the looming entitlement crunch represents businesses as usual, not change. Current and future taxpayers deserved a serious proposal to reduce the government’s burden on their wallets and the struggling economy. Instead, the president’s first budget represents an attempt to shove the government’s hand deeper into the American peoples’ pockets and lives.

The president made several questionable statements in his address earlier today. He promised “long overdue investments” in education. But federal spending on education has already increased dramatically with no positive results. He spoke of “undertaking health care reform so that we can control costs while boosting coverage and quality” and “investing in renewable sources of energy.” Yet we know any type of reform will mean higher taxes, government rationing, and slower economic growth.

Dick Morris has become my favorite opinion guy along with Dennis Miller. I guess because he says what I want to hear.

Who knows if he is right but he predicts the crash of BO. Unfortunately we will all go down with him while he gambles:

By Dick Morris 05.6.2009 Publish on TheHill.com on May 5, 2009

President Obama’s vision of the future is, apparently, an economy guided, steered and — when the occasion demands — commanded by the federal government. Some of the companies will remain private. Washington will take others over. But all will look to the White House, as to an orchestra conductor, for signals as to how and when and where to proceed.

This summary is the vision that emerges from the Chrysler bailout.

Whether or not one believes the claims of attorney Thomas Lauria (I do) that the investment bank Perella Weinberg Partners was strong-armed by the administration, the fact remains that the four firms that accepted the piddling offer of 29 cents on the dollar are all awash in Troubled Asset Relief Program (TARP) money.

Citigroup, Morgan Stanley, Goldman Sachs, and JPMorgan Chase all dutifully approved the offer from Washington, while Perella Weinberg reportedly held out for 50 cents. Did the combined $90 billion the four compliant firms owed Washington in TARP funds make a difference in their passive acquiescence? You bet it did.

They shouldn’t have said yes. Clearly, Obama was not about to pull the trigger, which would have sent tens of thousands of autoworkers straight into unemployment. Politically, he would have had no choice but to cough up the $4.5 billion loan the feds just gave Chrysler with or without a debt settlement. The political pressures that have always operated on this Democratic president are still there and still in play.

Knowing the ultimate vulnerability of the administration position, any investment bank that was looking out for its clients would have demanded more than 29 cents. But Citigroup, Morgan Stanley, Goldman Sachs, and JPMorgan Chase all had a higher calling — they had to appease King Barack I. To its credit, Perella Weinberg put its investors first.

But this little vignette shows exactly what the new rules of the game will be under this administration. It won’t be Soviet-style socialism or Reaganesque capitalism. The system will more resemble the Japanese arrangement where MITI, the Ministry of Trade and Industry, informally guided companies and told them what to do. In Japan, a nod usually suffices to command. In the United States, one has to use a hammer. But the result will be the same: compliant capitalism.

Companies will not look out for their shareholders or their employees or even their customers so much as watch the smoke signals from Washington to decide what to do. The markets won’t control decisions. Washington will.

The same balance of government control and nominal private ownership is evident in the mortgage rescue plan and the efforts to rekindle consumer lending. It will be manifest in the cap-and-trade legislation and in the priority that the administration will accord to green lending and job creation.

The strong-arming that obviously led up to the Chrysler deal will also be typical of the Obama industrial policy. When the chips are down, JFK’s pressure on U.S. Steel to lower its prices in 1962 will be the model for the Obama years. While terrorists need not fear any violation of their constitutional rights, CEOs of Fortune 500 companies will not be so fortunate.

At the core of the new policy will be the simple assumption that Washington knows best.

But it doesn’t. The stagnation of the Japanese economy in the past 20 years is eloquent testimony to the fact that government usually gets it wrong. Sometimes it makes the wrong decision because it fails to anticipate the market (as Japan did when it downplayed laptop computers and stressed mainframes). More often (as is normal in Japan), it is so in the thrall of special interests that it ends up articulating a consensus of those who would divide up the pie among them.

One way or another, the government usually runs the economy into the ground, as it will under King Barack I.

Its hard not to like someone who brings the informed and passionate loathing of the Clintons that Dick Morris does. As a pollster he is in his element. Political econ? Well, methinks he sometimes confuses being on Fox with being an expert.

In this case though he is pretty much on the money-- sounds like he is channeling Glen Beck

GB I think though is deeper and clearer on what's at stake here. This is not what DM calls "compliant capitalism". This is liberal fascism and is quite similar to the economics of Mussolini.

O'Reilly warned GB that the left would go after him with a vengence. And it will get personal and include his family. Like they are doing with Sarah Palin's daughter.

Anyway I don't know whether to laugh or cry when I read this:

"The Obama administration today unveiled program details of a $3.4 trillion federal budget for the fiscal year beginning in October, a proposal that includes substantial increases for a number of domestic priorities as well as a plan to trim or eliminate 121 programs for a savings of $17 billion."

Then says this:

"We can no longer afford to spend as if deficits don't matter and waste is not our problem," he said. "We can no longer afford to leave the hard choices for the next budget, the next administration -- or the next generation."

The lack of logic is (beyond) mind boggling and yet the MSM merrily trumpets his horn along for the ride.

Among the cuts is the fund for law enforcement officers killed in the line of duty. Reminds me of when the Obama campaign put it's porta-potties on top of a memorial for fallen officers at one campaign stop.

One of the biggest stories in politics earlier this year was about California's budget teetering on the edge of a $42-billion deficit abyss. It only staved off insolvency when its legislature ended three months of gridlock to pass a budget with steep tax hikes and spending cuts. Guess what the Obama Administration is doing? It is telling Governor Arnold Schwarzenegger that it will revoke nearly $7 billion in federal stimulus money unless the state restores legislated wage cuts for unionized health-care workers.

Obama Administration to federalism: Drop dead.

In its budget deal, California agreed to $74 million in wage cuts for unionized home health-care workers. The Service Employees International Union huffed to the higher power in Washington, which duly agreed to hold California's stimulus hostage.

Governor Schwarzenegger has sent a letter asking the feds to reconsider, noting the cuts were taken in response to "an unprecedented fiscal crisis." Even now the state faces an estimated cash-flow problem of some $17 billion by July.

Restoring the union money will require a two-thirds vote of the Legislature, a task in California somewhat akin to moving the Sierra Nevadas. Still, it's worth noting where the Obama team ranks the political authority of a legislative enactment by the state of California versus the political clout of a union.

WASHINGTON (AP) -- With the economy performing worse than hoped, revised White House figures point to deepening budget deficits, with the government borrowing almost 50 cents for every dollar it spends this year.

The deficit for the current budget year will rise by $89 billion to above $1.8 trillion -- about four times the record set just last year. The unprecedented red ink flows from the deep recession, the Wall Street bailout, the cost of President Barack Obama's economic stimulus bill, as well as a structural imbalance between what the government spends and what it takes in.

As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion, the White House says. The deterioration reflects lower tax revenues and higher costs for bank failures, unemployment benefits and food stamps.

For the current year, the government would borrow 46 cents for every dollar it takes to run the government under the administration's plan. In one of the few positive signs, the actual 2009 deficit is likely to be $250 billion less than predicted because Congress is unlikely to provide another $250 billion in financial bailout money.

The developments come as the White House completes the official release of its $3.6 trillion budget for 2010, adding detail to some of its tax proposals and ideas for producing health care savings. The White House budget is a recommendation to Congress that represents Obama's fiscal and policy vision for the next decade.

Annual deficits would never dip below $500 billion and would total $7.1 trillion over 2010-2019. Even those dismal figures rely on economic projections that are significantly more optimistic -- just a 1.2 percent decline in gross domestic product this year and a 3.2 percent growth rate for 2010 -- than those forecast by private sector economists and the Congressional Budget Office.

For the most part, Obama's updated budget tracks the 134-page outline he submitted to lawmakers in February. His budget remains a bold but contentious document that proposes higher taxes for the wealthy, a hotly contested effort to combat global warming and the first steps toward guaranteed health care for all.

Obama's Democratic allies controlling Congress have already made it clear that they will reject key elements of his plan. Already apparently dead is a plan to raise $267 billion over the next decade to pay for his health care initiative by curbing the ability of wealthier people to reduce their tax bills through deductions for mortgage interest, charitable contributions and state and local taxes.

And the congressional budget plan approved last month would not extend Obama's signature $400 tax credit for most workers -- $800 for couples -- after it expires at the end of next year.

Obama's remarkably controversial "cap-and-trade" proposal to curb heat-trapping greenhouse gas emissions is also reeling from opposition from Capitol Hill Democrats from coal-producing regions and states with concentrations of heavy industry. Under cap-and-trade, the government would auction permits to emit heat-trapping gases, with the costs being passed on to consumers via higher gasoline and electric bills.

Among the new proposals is a plan -- already on its way through Congress -- that would increase the Federal Deposit Insurance Corporation's borrowing authority from $30 billion to $100 billion in order to grant a two-year reprieve from higher deposit insurance premiums while the industry is struggling.

Also new are several tax "loophole" closures and increased IRS tax compliance efforts to raise $58 billion over the next decade to help finance Obama's health care measure. The money makes up for revenue losses stemming from lower-than-hoped estimates of his proposal to limit wealthier people's ability to maximize their itemized deductions.

The updated budget also would repeal an unintended tax windfall taken by paper companies that use a byproduct in the paper-making process as fuel to power their mills. The tax credits were never intended for paper companies, but now they could be worth more than $3 billion a year, according to a congressional estimate.

The budget would make permanent the expanded $2,500 tax credit for college expenses that was provided for two years in the just-passed economic stimulus bill. It also would renew most of the Bush tax cuts enacted in 2001 and 2003, and would permanently update the alternative minimum tax so that it would hit fewer middle- to upper-income taxpayers.

By Richard BaehrBarack Obama signaled to the ECNPC (the ever compliant national press corps) last week, that they should make a big deal of his proposed $17 billion in spending cuts for the 2010 fiscal year, many of which (40%) were originally proposed by George Bush a year ago and not accepted by the Democratic controlled Congress at that time.

Today comes word that the new estimate for the deficit for 2009 is about $100 billion higher than thought just a month ago (and that incremental deficit, more than 5 times the size of Obama's proposed cuts, will be run up just in the remaining five months of the fiscal year).

The 2010 deficit number has also been revised -- also likely higher by nearly $100 billion. Expect more increments to this number as the year goes on.

One thing we can count on is that every estimate from the Administration proves to be optimistic and self serving (e.g. the $7 trillion ten year accumulated deficit, that the non-partisan Congressional Budget Office estimated at $9.3 trillion, or a third higher than the Obama budget team estimate). The new estimates are for a deficit of over $1.8 trillion for fiscal 2009, and what the New York Times will likely call a "greatly reduced" deficit of just under $1.3 trillion next year.

For fiscal 2009, federal spending of about 3.5 trillion will be supported 54% by collected tax revenues, and the rest (near half) by debt. That has never happened before in this country's history -- neither the size of the deficit (the 2009 deficit is 4 times as large as 2008's prior record deficit of 450 billion, and the 2010 deficit is 3 times as large as that of 2008) nor the record share of the deficit ( near 50%) that needs to be financed by debt.

What do you call a country whose government is half supported by debt, much of it foreign? Probably one that the International Monetary Fund would consider a basket case that needed to be put on an expenditure diet. The words "banana republic" and "Argentina" come to mind.

We know that the Obama administration's answer to the puzzle about why the deficit is so large: taxes are too low. It explains why a few times each week, it seems, the Treasury Department introduces a new initiative designed to close some "loophole" for corporations or wealthy Americans, the two principal whipping boys for this Administration.

Obviously, every dollar the Administration wants to spend ($3.6 trillion next year) is believed to be essential, except for the 17 billion proposed to be cut (less than one half of one per cent of total spending). The government's financial picture at the moment, were it a family or a corporation, would be unsustainable, and laughable. But the Obama administration and the ECNPC, will tell us (or try to sell us) that we have entered a new age of responsibility where we are taking on the big problems where we need to spend more- health care, energy, education.

Paul Krugman, one of the Administration's favorite economists, is encouraging even more stimulus spending on top of the $787 billion already signed into law by President Obama.

Are Americans so foolish that they do not understand that their government cannot spend twice what it "earns"?

Will Americans at some point catch on that foreign nations may not support our reckless spending forever, and it will have to come from greatly increased taxes -- not just on the heavily demagogued high income share of the population (fewer than 3%), but mostly from the middle class?

Will people understand that to attract buyers for all this new debt, interest rates for government debt will have to go up, which in turn will raise interest rates for everyone else in the country as well, putting a real damper on future economic growth?

If the Administration were concerned with the deficit, they would delay much of the new spending on new health care initiatives and education programs, and the stimulus bill would have been directed more at economic growth and job creation, and far less at rewarding Democratic Party interest groups.

Were economic growth a real concern, the idea of pushing a multi trillion dollar cap and trade tax on American consumers and businesses would never be considered now, especially with such scant evidence of any man-made global warming actually occurring.

It is hard not to conclude that the primary purpose of economic policy in the current administration is simply to increase the size of the public sector and shrink the private sector. Chris Bowers, a left wing blogger, said it best a month back -- that "progressives" should be very pleased with the Obama administration, since in less than three months, they had already increased the government's share of the economy by more than 3%. Think about that one; the essence of progressive policy is not where government money is spent, or what it achieves, just that more and more (an ever growing share) is spent by government, not the people who support it (they will have less to spend, since it will be taken away in taxes).

For anyone who thinks we are seeing a temporary spending binge due to the recession, and that federal spending will recede over time, maybe they can provide me a list of all the mothballed federal spending programs that the Congress, in particular a Democratic controlled Congress, has ever eliminated in he past. We are entering an ear of greatly increased federal spending, higher taxes, deficits, and interest rates, and slower economic growth. For an administration supposedly concerned with future generations, they are doing their best to ensure that those future generations will have an enormous hole to dig out from.

The guy who is applauding and with Dem houses is responsible for the largest speding bills in our hsitory says this and the MSM (except for fox and talk radio) sits back and lets him get away with this:

****By Roger Runningen and Hans Nichols

May 14 (Bloomberg) -- President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”

Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”

Earlier this week, the Obama administration revised its own budget estimates and raised the projected deficit for this year to a record $1.84 trillion, up 5 percent from the February estimate. The revision for the 2010 fiscal year estimated the deficit at $1.26 trillion, up 7.4 percent from the February figure. The White House Office of Management and Budget also projected next year’s budget will end up at $3.59 trillion, compared with the $3.55 trillion it estimated previously.

Two weeks ago, the president proposed $17 billion in budget cuts, with plans to eliminate or reduce 121 federal programs. Republicans ridiculed the amount, saying that it represented one-half of 1 percent of the entire budget. They noted that Obama is seeking an $81 billion increase in other spending.

Entitlement Programs

In his New Mexico appearance, the president pledged to work with Congress to shore up entitlement programs such as Social Security and Medicare. He also said he was confident that the House and Senate would pass health-care overhaul bills by August.

“Most of what is driving us into debt is health care, so we have to drive down costs,” he said.

“It’s time for reform that’s built on transparency, accountability, and mutual responsibility, values fundamental to the new foundation we seek to build for our economy,” the president said.

Obama called on Congress to send to him by May 25 a bill that would clamp down on what he says are sudden rate increases, unfair penalties and hidden fees. He also wants the measure to strengthen monitoring of credit-card companies.

House Bill

The U.S. House of Representatives passed the credit-card bill last month after adding a provision requiring banks to apply consumers’ payments to balances with the highest interest rates first. The bill also imposes limits on card interest rates and fees.

The Senate continued debating its version of the bill today. It would require credit-card companies to give 45 days’ notice before increasing an interest rate. It would prohibit retroactive rate increases on existing balances unless a consumer was 60 days late with a payment.

The president said Americans have been hooked on their credit cards and share some blame for the current system. “We have been complicit in these problems,” he said. “We have to change how we operate. These practices have only grown worse in the midst of this recession.”

The American Bankers Association, which represents card issuers, has warned lawmakers and the Obama administration against taking punitive action or setting requirements that are too stringent. Doing so, the lobby group says, would limit consumer credit and worsen a credit crunch.

Obama said that restrictions “shouldn’t diminish consumers’ access to credit.”

Uncollectible Debt

Uncollectible credit-card debt rose to 8.82 percent in February, the most in the 20 years that Moody’s Investors Service Inc. has kept records. Lawmakers have said they’re under increasing pressure from constituents to respond to rising interest rates and abrupt changes to consumers’ accounts.

Obama held a White House meeting last month with executives from the credit-card industry, including representatives from Bank of America Corp. and American Express Co. Afterward, he told reporters that credit-card issuers should be prohibited from imposing “unfair” rate increases on consumers and should offer the public credit terms that are easier to understand.

“The days of any time, any increase, anything goes -- rate hike, late fees -- that must end,” Obama said today at Rio Rancho High School. We’re going to require clarity and transparency from now on.”

He also said the steps he has taken to stimulate the economy and start the debate on overhauling the health-care system are beginning to take effect.

‘Beginning to Turn’

“We’ve got a long way to go before we put this recession behind us,” Obama said. “But we do know that the gears of our economy, our economic engine, are slowly beginning to turn.”

Taking questions from the audience, Obama repeated his stance that he wants legislation to overhaul the health-care system finished before the end of the year, saying it is vital to the economy.

Health-care costs are driving up the nation’s debt and burdening entitlement programs such as Medicare, the government- run insurance program for those 65 and older and the disabled.

The programs’ trustees reported May 13 that the Social Security trust fund will run out of assets in 2037, four years sooner than forecast, and Medicare’s hospital fund will run dry by 2017, two years earlier than predicted a year ago.****

Feingold Blocks Bill to Honor ReaganBy Jackie KucinichRoll Call StaffMay 19, 2009, 12 a.m. Republicans are trying to pass legislation in the next few weeks to kick off the commemoration of the 100th anniversary of Ronald Reagan’s birth, and the only hurdle appears to be Sen. Russ Feingold (D-Wis.), who is refusing to let the Senate vote on the bill.

Yesterday I was at a commencement at Lehigh and the speaker was Jeff Sachs the ultra liberal author economist.

He spoke about world poverty and world climate change. Fair enough. Then he got political. Jimmy Carter started to promote solar unitl Reagan came along and mocked Carter. Reagan then elevated our military presence in the Persian Gulf to open up the oil spigets that sent us on the planetary suicidal mission of destroying our planet, increasing war in the middle east, keeping us energy dependent all the while destroying hopes for world peace, the end of starvation, ignorance, and poverty, through US imperialism and world domination.

He implied we thus had Somalia, drought and the persistance of all the ills of the world and our collision course with the world population explosion was all due to Reagan's wrong headed theories. So for the last thirty years we were on the wrong trajectory.The whole concept of "country" and culture is Midieval(sp?).

These are the kinds of people running America today.To them, Reagan is a destroyer of worlds.

This one could be posted so many places that I'm at something of a loss. Time to start an "Intelligence Matters" thread?

Democrats' Assault On the CIABy Michael GersonWednesday, May 20, 2009

In a little over 100 days, the Obama administration and the Democratic Congress have delivered a series of blows to the pride and morale of the Central Intelligence Agency.

It began with the release of the Justice Department memos -- a move opposed by CIA Director Leon Panetta along with four previous directors. Then, Attorney General Eric Holder Jr. did not rule out Justice Department cooperation with foreign lawsuits against American intelligence operatives. Then, House Speaker Nancy Pelosi accused the CIA of lying to her in 2002 about waterboarding, which she admitted learning about five months later anyway but did nothing to oppose because her real job was to "change the leadership in Congress and in the White House."

To stanch the CIA's bleeding morale, Democrats have tried reassurance. President Obama, speaking at CIA headquarters, took the Fred Rogers approach: "Don't be discouraged that we have to acknowledge potentially we've made some mistakes. That's how we learn." Yes, children, hypocritical congressional investigations and foreign kangaroo courts are really our friends. House intelligence committee Chairman Silvestre Reyes sent a sympathy note to Langley: "In recent days, as the public debate regarding CIA's interrogation practices has raged, you have been very much in my thoughts." There should be a section at Hallmark for intelligence operatives unfairly accused of war crimes.

The only effective reassurance came from Panetta, who pointed out to Pelosi and others that the CIA actually keeps records of its congressional briefings. "Our contemporaneous records from September 2002," Panetta wrote, "indicate that CIA officers briefed truthfully on the interrogation of Abu Zubaida, describing 'the enhanced techniques that had been employed.' " A primary advocate of the "truth commission" has apparently misplaced her own supply.

Is there any precedent for a speaker of the House of Representatives seeking political shelter by blaming national security professionals? Or for a commander in chief exposing intelligence methods at the urging of the American Civil Liberties Union? Actually, such treatment has precedents. In 1975, the Church Committee nearly destroyed the human intelligence capabilities of the CIA. In the early 1990s, Sen. Daniel Patrick Moynihan urged closing the agency entirely. The Clinton administration imposed massive budget cuts, leaving behind a demoralized institution.

And now Obama has described the post-Sept. 11 period as "a dark and painful chapter in our history." In fact, whatever your view of waterboarding, the response of intelligence professionals following Sept. 11 was impressive. Within days, the CIA had linked up with the Northern Alliance in Afghanistan and begun preparations to remove the Taliban. The counterterrorism center run of out CIA headquarters was the war on terror in the months after the attacks, making daily progress in capturing high-value targets. Now the president and his party have done much to tarnish those accomplishments. So much for the thanks of a grateful nation.

Contrast this affront to Obama's treatment of the military. When Gen. Ray Odierno argued that the release of military abuse photos would put American troops at risk, Obama quickly backed down. By one account, Odierno told the president, "Thanks. That must have been a hard decision." Obama replied: "No, it wasn't at all." Obama has deferred to his military commanders on the timing and strategy of American withdrawals from Iraq. And he has proposed an escalating military commitment in Afghanistan and Pakistan -- leading 51 House Democrats last week to vote against a military funding bill.

Defense writer Tom Ricks claims that Obama is being "rolled" by the military. Perhaps it is just an appropriate respect by the commander in chief for the troops at his command.

This obvious difference in treatment between military and intelligence is both paradoxical and hypocritical. Traveling recently in Iraq, Pelosi noted, "If we're going to have a diminished military presence, we'll have to have an increased intelligence presence." This has been the main Democratic argument against the whole idea of the war on terror -- that guns and bombs are no substitute for timely information. "This war on terror is far less of a military operation and far more of an intelligence-gathering, law-enforcement operation," Sen. John Kerry once claimed.

But this object of praise -- intelligence-gathering -- is again the object of liberal assault. "To put the matter at its simplest," writes Gabriel Schoenfeld, "American elites have become increasingly discomfited over the last decades by the very existence of a clandestine intelligence service in a democratic society."

But our democratic society still depends on intelligence officers -- just as surely as it depends on our men and women in uniform.

Before the passage of the American Recovery and Reinvestment Act of 2009 (also known as the "stimulus bill"), President Obama and his chief economic advisor, Larry Summers, stressed that the government's response to the economic crisis needed to be "timely, targeted, and temporary." As predicted by a Heritage Foundation analyst,[1] the bill is neither timely nor targeted. Only time will tell if it is temporary.

Not Timely

Government agencies have spent only a tiny fraction of money planned to be spent in fiscal years 2009 and 2010. Moreover, agencies have not allocated most of the money that has been directed toward them for any named projects.

As of May 8, less than 8 percent of the spending scheduled for fiscal years '09 and '10 has taken place.[2] That 8 percent ($37 billion) had been spent almost entirely on Health and Human Services until the week of May 1, when $12 billion was spent in one week by the Department of Labor. Before the week of May 1, just 3.3 percent of scheduled '09 and '10 spending had occurred.

Of the $461 billion called for to be spent by the stimulus bill before the end of fiscal year 2010, just $37 billion has been doled out. Of that, $16 billion has been spent by the Health and Human Services department, $12 billion has been spent by the Department of Labor, and $6 billion has been issued in one-time payments to Social Security recipients. All of the other agencies combined have spent a total of $2.6 billion as of May 8.

Not Targeted

Fiscal year 2010 ends September 30, 2010, but the recession could end sooner than that. Indeed, a majority of economists surveyed in April predicted the recession will end in 2009.[3] Fed chairman Ben Bernanke also thinks the recession will end this year. The stimulus bill threatens to miss the very target it was meant to address.

Spending to fight an already-ended recession is unnecessary and wasteful. More diffusely, the specific spending programs targeted to fight the recession have mostly not been named.

Of the $461 billion of the stimulus bill the President's budget blueprint says will be spent in fiscal years 2009 and 2010, just $102 billion has even been targeted for specific outlays by government agencies. Once again, a large amount of this sum is allocated by the Health and Human Services Department. Several agencies (such as the Agency for International Development, NASA, and the National Science Foundation) have yet to say how any of the billions of dollars granted to them by the act will be spent. Just 22 percent of the fiscal years 2009 and 2010 stimulus spending has been planned by government agencies.[4]

The New Keynesianism

The new Keynesian philosophy fashionable among Washington policymakers is that government spending can pull an economy out of recession--that government spending "injects" new demand into the economy, thereby increasing GDP.

But every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. Rather than add new demand, government spending merely redistributes existing demand. Even transferring money from savers to spenders will not add new demand, because nearly all savings are banked or invested and then quickly made available for someone else to spend. Simply put, Congress cannot create new demand out of thin air, and this explains the repeated failure of Keynesian policies.

People Will Spend It Better

Congress should:

Call back unspent funds when it is clear the recession has waned, orCall them back immediately and budget the unspent money for across-the-board tax cuts.The former would be fiscally responsible, while the latter would be more effective at fighting the recession than continuing to wait for agencies to decide what to do with the money. Private citizens will spend the money more wisely, or in the case of some, save it. This would be better than having the money go to government overhead and squandering it on more unneeded programs that burn through the wealth of America's children.

Patrick Tyrrell is a Research Coordinator in the Center for Data Analysis at The Heritage Foundation.

Vice President Joe Biden is widely praised for the expertise he brings in helping Barack Obama choose a replacement for retiring Supreme Court Justice David Souter. Having served for three decades on the Senate Judiciary Committee, he is considered an asset both for his relationships with committee members and his familiarity with the nuts and bolts of judicial nominations. So let's have a look at how the confirmation process actually fared under Mr. Biden's leadership.

As a member of the Senate Judiciary Committee, Mr. Biden was present for the nomination and confirmation of every currently sitting Supreme Court justice except for John Paul Stevens. In 1986, the year before Mr. Biden took over as committee chairman, Antonin Scalia was approved by the Senate in a vote of 98-0. Then came Robert Bork and a presidential election.

Before Judge Bork's nomination, Mr. Biden had said he would support him. And why not? He was widely considered a dazzling legal mind and had even received (during his confirmation to the D.C. Circuit Court of Appeals) a rating of "exceptionally well-qualified" from the liberal-leaning American Bar Association. "Say the administration sends up Bork," Mr. Biden told the Philadelphia Inquirer in November 1986, "and, after our investigations, he looks a lot like Scalia. I'd have to vote for him, and if the [special-interest] groups tear me apart, that's the medicine I'll have to take."

But by the time of the actual nomination, Democrats were promising to play "hardball" with President Ronald Reagan's nominees and Mr. Biden was running for president. Mr. Biden's Democratic colleagues lined up against the nominee. They were led by Sen. Edward Kennedy, who demonized him with a monologue on "Robert Bork's America," which he promised would be "a land in which women would be forced into back alley abortions." Liberal groups joined the chorus for Mr. Biden to recant his earlier support, which he did, helping to defeat Mr. Bork's nomination.

Back then the tactics were considered shocking. Warren Burger, the former chief justice, said he was "astonished" by the comments he'd read about a nominee he thought was one of the most qualified he'd seen in 50 years. If the Senate rejected Mr. Bork, he said, "then they shouldn't have confirmed me."

Just one year after the conservative Mr. Scalia's unanimous confirmation the winds had changed dramatically. The Senate had hitherto proceeded on the principle that it owed the president deference on his judicial selections. No longer.

"The framers clearly intended the Senate to serve as a check on the president and guarantee the independence of the judiciary," Mr. Biden said in August 1987 in defense of his newfound opposition to Judge Bork. "The Senate has an undisputed right to consider judicial philosophy." With that marker placed, the ultimate winner of the seat vacated by Justice Lewis Franklin Powell Jr. was a nominee nearly devoid of political philosophy -- Anthony Kennedy.

Mr. Biden's obstruction was further rewarded by the first President Bush. In attempting to dodge controversy, he gave liberals David Souter, whose appeal was enhanced by the fact that he had been a federal judge for less than a year and had almost no paper trail.

By the time Clarence Thomas's confirmation hearings came around, Mr. Biden's modus operandi was well known. In his book, "My Grandfather's Son," Justice Thomas recalls that before the Anita Hill inquisition began, Mr. Biden called him and said "Judge, I know you don't believe me but if the allegations come up I will be your biggest defender." "He was right about one thing," Justice Thomas wrote, "I didn't believe him."

Under Mr. Biden's leadership, holding up nominations to the nation's appeals courts also became a routine exercise. In 1988, the Senate Judiciary Committee delayed 17 months before refusing to confirm law professor and scholar Bernard Siegan to the Ninth Circuit Court of Appeals because of his libertarian positions on economic issues. In 1992, Mr. Bush's nominee to the 11th Circuit, Edward Carnes, endured an eight-month delay and an attempted filibuster before finally being confirmed. By 1992, 64 judicial nominees were stuck in the senatorial muck waiting for the Judiciary Committee to give them a yea or nay.

The Senate obstructionism that began with Reagan's nominees thus became a game of political revenge as each new batch of nominees was made to suffer at the hands of one party for the treatment its nominees had received in the last round. Republicans blocked some of President Bill Clinton's nominees, including briefly, Sonia Sotomayor, the Second Circuit judge said to be on Mr. Obama's short list to replace Mr. Souter. Unable to bottle up Miguel Estrada in committee in 2003, Democrats filibustered him on the floor of the Senate. Sen. Carl Levin (D., Mich.) held up as many as four judicial nominations for years in retribution for Republicans blocking Mr. Clinton's nomination of Helene White (she was confirmed for the Sixth Circuit last year). And so on.

The effect of this game has been toxic not only for the nominees but for the courts. Many circuits have suffered judicial emergencies, defined as vacancies on courts overwhelmed by their caseloads, or vacancies languishing more than 18 months on busy circuits. Some stood open longer. The Bush administration's 2006 appointment of Peter Keisler to fill the D.C. Circuit seat vacated by John Roberts was left to expire, unfilled, at the end of the administration.

True, Supreme Court nominees John Roberts and Samuel Alito were confirmed -- but without the support of then Sens. Joe Biden or Barack Obama. Mr. Alito was confirmed by a vote of 58-42, the second narrowest margin in Senate history (after Clarence Thomas). Even Chief Justice Roberts's margin of 78-22 was contentious in historical terms. Ruth Bader Ginsburg was confirmed 93-3, Sandra Day O'Connor 99-0, John Paul Stevens 98-0, and David Souter 90-9.

What is in store for Mr. Obama's nominees remains to be seen. Sen. Jeff Sessions, the ranking Republican on the Senate Judiciary Committee, has said he isn't inclined to the filibuster even if it is an option and most expect the president's Supreme Court choice will be confirmed.

As a matter of judicial philosophy, however, Mr. Obama has said he wants a nominee who "understands that justice isn't about some abstract legal theory or footnote in a case book." If that is considered by opponents as grounds for rejection Joe Biden will know where they're coming from.

Ms. Levy is a senior editorial writer at the Journal, based in Washington.

The Obama Administration is abusing bankruptcy law to benefit a favored constituency, the United Auto Workers union. This threatens serious consequences:

Without the discipline of a real bankruptcy reorganization, General Motors and Chrysler may not be able to achieve the reforms that they need to survive and prosper.The restructuring plans announced by both automakers are not bold enough. To gain a competitive edge, they will have to cut more dealers loose, put an end to the Byzantine system of work rules that stifles flexibility, and in general, make deeper cuts.

Selling Chrysler to a shell corporation for the purpose of divesting lenders of their rights is a stunning abuse of U.S. bankruptcy laws that threatens to upend this important resource for troubled companies.

The "rule of law" means clear, generally applicable laws by which individuals can organize their affairs and which are applied consistently, without respect to status. By favoring a union over creditors with superior rights, the Obama Administration has violated a fundamental principle of our constitutional government.

Striking down contractual rights arbitrarily, merely because they are inconvenient or expensive to the government, raises the costs of making and enforcing agreements across the economy.

This episode of lawlessness began with legislation, the Emergency Economic Stabilization Act, that many at the time recognized as an illegally unbounded delegation of power from the legislative to the executive branch. It was that act which created the TARP that is now the Administration's slush fund for bailing out its allies and otherwise upsetting economic expectations. That outcome should be no surprise; unbridled discretion breeds unchecked power.

The bankruptcies of Chrysler and soon General Motors are a microcosm of the lawlessness that threatens our freedom and our prosperity. With its legislative power, Congress can put an end to the bailouts and begin the slow process of unwinding those that entangle us today.

My name is Andrew Grossman. I am Senior Legal Policy Analyst at The Heritage Foundation. The views I express in this testimony are my own, and should not be construed as representing any official position of The Heritage Foundation.

My testimony this afternoon concerns the impact that the abuse of the bankruptcy system to bail out Chrysler and soon General Motors will have on the automobile industry, the rule of law, and the economy. This is an important issue, and I applaud the Committee for taking the time to address it and consider my comments.

Members of this Committee should focus on three points. First, that the U.S. auto industry itself has been harmed by the initiatives of the Bush and Obama Administrations that were meant to save it. Second, that the Obama Administration's abuse of bankruptcy to carry out its initiatives will serve as a precedent for others to sidestep the requirements of America's Chapter 11 reorganization process. The third point is that in rescuing Chrysler and General Motors, the federal government has trampled the rule of law in ways that will prolong our current recession unless Congress acts to rein in the excesses of the Administration's interventionist policies.

The auto industry, like AIG and like many of the banks now scrambling to extract themselves from the government's Troubled Asset Relief Program (TARP), may have been better off had the federal government followed the will of Congress and declined to intervene in their troubles. Though this counterfactual is difficult to prove--we will, of course, never know what would have happened in some alternative scenario--the major issues left unaddressed, or only partially addressed, in the government's reorganization strategy point to this conclusion. So, too, do a surprising number of indicators.

The Detroit-centered auto industry's collapse was the result of deep-seated structural problems that have been decades in the making--not just the recent drop-off in sales.To understand the extent of these problems, some history is required.

The combined market share of the Big Three U.S. automakers has been in decline for more than 35 years, since the oil crisis provided an opening for more fuel-efficient Japanese cars. In the 1980s, with the price of oil down, foreign carmakers gained market share on the strength of their quality, reliability, and prices, and quickly muscled in to the profitable luxury segment of the market. More recently, foreign automakers simply out-innovated their American competitors, investing heavily in smart, fuel-efficient vehicles that Detroit is now struggling to duplicate.

Those failures in management and leadership have been compounded by bad operational and governmental policy. Years of protectionism, such as import restrictions, complex fleet requirements, and regulations that raise costs for foreign producers, shielded the Big Three from competition in vital markets but allowed their creative juices to evaporate. Meanwhile, fat years and government interference allowed the automakers and their workers to put off restructuring their labor agreements, even as foreign competitors opened U.S. plants producing cars with fewer workers working at less cost and achieving greater quality. By 2008, these "legacy costs" dominated the U.S. automakers' balance sheets, and they spent $20 to $30 more per hour on labor than their competitors, even following minor concessions by the unions, and, due to inflexible work rules, continued to require more hours to produce a vehicle. Well aware of the writing on the wall, the Big Three and the United Auto Workers union demonstrated their cynicism in signing on to untenable labor agreements, under which the companies lose money on most small car sales, under the assumption that the taxpayers will eventually shoulder much of the burden.

The Big Three are also burdened with obsolete and expensive business structures. All are top-heavy with management and bureaucracy, compared to other manufacturing industries. They are also bogged down by too many nameplates that, due to state franchising laws, cannot easily be folded into other brands. As of December, General Motors manufactured and marketed automobiles under eight brands in the United States, including Chevrolet, Saturn, Pontiac, and Buick, in a market where few customers perceive any significant difference among them. Their antiquated and bloated dealership structures also prevent the Big Three from instituting modern and more flexible inventory-management practices and selling cars over the Internet.

In late 2006, shortly before the current economic slowdown, Ford separated itself from its two domestic rivals. Its new management team, led by former Boeing executive Alan Mulally, recognized both that the company needed a top-to-bottom revamp and that, without extraordinary commitment, this restructuring would probably fare no better than the many others Ford had undertaken over the decades. To commit itself to a major, years-long overhaul, Ford mortgaged its assets to the hilt, raising $23.6 billion to reorganize, develop new cars and technologies, and free itself of many of the legacy costs that sapped its competitiveness.

Already weakened by years of bad business decisions, the Big Three were hit hard by high fuel prices and then the economic slowdown. Though sales are down across the industry, buyers' interest in the Big Three's fleets has plummeted. For the first time in history, Detroit's share of the U.S. market dipped below 50 percent in 2008 and has fallen further since.

Ford, to date, has had the wherewithal and the resources to ride out the recession and weak auto market. General Motors and Chrysler, however, have not, and so late last year asked the federal government to give them the money needed to undertake the sort of reorganization already well underway at Ford.

The usual process for accomplishing this type of restructuring is bankruptcy--specifically a Chapter 11 filing. Under Chapter 11, bankruptcy affords companies that have hit hard times a fresh start and a chance to reorganize to take better advantage of their assets. Dire claims that bankruptcy is somehow equivalent to the end of a business--for example, some claimed that bankruptcy would imperil the employment of all of an automaker's workers--are simply incorrect. Instead, the reorganization process provides unique flexibility to unlock the fundamentally sound productive capabilities of a faltering business by freeing it of many obstacles to success, such as unviable contracts, crushing debt, and poor management. Reorganization is the usual tonic for businesses, like the Big Three, that need to adjust quickly to new economic realities but are, at their cores, sound, productive, and potentially profitable.

Yet after Congress declined to bail out General Motors and Chrysler, the Bush Administration and then the Obama Administration acted to accomplish the same end, drawing on funds that had been appropriated to shore up financial institutions under the TARP.

Bankruptcy has been, with Chrysler, and probably will be, with General Motors, a part of this process. As explained further below, the Obama Administration's Automotive Task Force (ATF) developed a plan to use several provisions of the bankruptcy code while evading most of its requirements. In this way, it could bail out Chrysler and General Motors for far less money than would otherwise be required--essentially by forcing others to pay for much of it--without relinquishing its effective control of either company or forcing favored constituencies, unions chief among them, to accept serious concessions.

The result is that neither company will go through the full Chapter 11 restructuring process but only, in the words of various Administration officials, a "quick dip" or "surgical bankruptcy." Thus, both will forgo the essential discipline of the Chapter 11 process, its narrow focus on finances and sustainability, that has made it so successful. Altering or evading this essential focus reduces the likelihood of achieving the goal: rehabilitating a business that has suffered financial failure and restoring it to profitability and, over the longer term, success.

Given the deep-seated nature of these companies' problems--how long they have persisted, how much they cut to the core of their businesses--it is obvious that meek efforts will not suffice. Yet, aside from the billions of taxpayer dollars being committed to them, meekness, rather than discipline, buttressed by tough talk characterizes the Obama Administration's approach. The result is that heavily touted reforms are less aggressive than could be expected in an ordinary bankruptcy reorganization. This imperils both companies.

One example is the rationalization of dealer networks. Both General Motors and Chrysler recently announced plans to sever their ties with some of their dealerships. Chrysler, relying on a provision of bankruptcy law that allows the setting aside of contracts, will drop 800 of its dealers, about a quarter of its total network, leaving about 2500. General Motors, meanwhile, notified 1,100 of is 6,000 dealers that their contracts will not be renewed next year; it hopes to cut another 900 to 1,300 dealers over the next few years, reducing its total to 3,600 to 4,000. Further reductions could come from attrition and consolidation.

These are, unambiguously, steps necessary to the survival of both automakers, but there is a real question as to whether they are enough. Even with the cuts, neither company will come close to matching Toyota's much-envied statistic of 1,100 car sales per dealer, per year, on average. If it meets its most aggressive goals, General Motors will still have, relative to that standard, an excess of 1,800 dealers. The result is that overhead and marketing expenses will remain too high, that dealers in some markets may face cannibalizing competition from cross-town rivals, and that many dealers will not be able to invest the money necessary to improve customer experience.

If the economy, and car sales, recover, both companies will find it tough to make further cuts. Outside of bankruptcy, both will be, once again, subject to restrictive state franchising laws that heavily penalize closures. For example, when General Motors shut down one underperforming and duplicative brand, Oldsmobile, in 2004, it had to pay dealerships over $1 billion in "financial assistance" to avoid lawsuits and is still, 4 years later, embroiled in litigation from former Oldsmobile dealers who declined to accept assistance or settle their claims. The costs could be even greater for cutting loose multiple-brand dealers.

There is also concern about which dealers are being cut and whether they are the right ones to go. As wards of the state, both automakers face intense pressure to make decisions that reduce political friction, rather than those that maximize economic gain. It would be difficult to believe, considering the ATF's deep involvement in both companies' plans, as well as the power of certain Members of Congress, that no political pressure was brought to bear and that all decisions were made entirely on the merits.

Unfortunately, such pressure, and such doubt, will accompany every decision made by General Motors and Chrysler in the months ahead. Some, for example, speculate that General Motors and Chrysler threw their support behind President Obama's new emissions and fuel efficiency standards at the behest of his Administration.[1] No doubt politics played some role in transforming the automakers' former intransigence on the issue.

As with dealers, both companies have begun the process of culling underperforming brands from their stables to reduce expenses and improve focus. Again, this is a necessary step, but questions remain as to whether it is enough. Does Chrysler need both the Chrysler brand and Dodge? And while General Motors was right to retire Pontiac, and Cadillac maintains its allure, does it need Chevrolet, Buick, and GMC, or do further opportunities to cut brands, and costs, exist? These questions could be answered in a regular Chapter 11 case, but outside of that context, there's little to guide the inquiry. Some industry analysts, however, have maintained for years that these extra brands only add costs and distraction, not value.

And once again, trimming brands in future years will be a difficult, expensive effort, due to the same state laws that make it hard to cut loose dealers. Efficiencies forgone now, during restructuring, may not be available in the future.

Labor is another area where the concessions made, though a big step in the right direction, may be insufficient to put General Motors and Chrysler on a level playing field with their competitors. At this moment, General Motors is locked in negotiations with the United Auto Workers, but Chrysler completed a deal with the union shortly before it entered bankruptcy. The new agreement will, in theory, eventually put hourly costs in line with those of the foreign automakers, known as "transplants," who build cars in the United States. It also trims benefits a bit (e.g., vision, dental, prescriptions for Viagra), reforms overtime calculations, and consolidates some skilled trades to reduce the complexity of work rules.

Some issues, however, were not fully addressed by the new agreement. Current employees, for example, will not be asked to take cuts in their base wage rates until at least 2011, if at all. At that point, the company and the union will enter into binding arbitration with the stated goal of equalizing "all-in" hourly wages with those of the transplant automakers. That agreement could potentially push equalization even further into the future; if auto sales have recovered by then, Chrysler may not be in a position to demand that its workers accept more cuts. The agreement also requires the automaker to continue making payments to the union-run Voluntary Employee Beneficiary Association (VEBA) that provides health benefits to retirees and their families. Those payments will total $9.2 billion. Benefits for laid-off workers will also remain unusually generous. Some workers will be eligible to receive payments covering 50 percent or more of their gross pay for up to 2 years after being laid off. Given the need to shrink operations, this stands to be a significant expense.

Work rules also remain a barrier to competitiveness. The agreement does make some significant improvements to these Byzantine arrangements that govern nearly every facet of automobile production, but they will still reduce flexibility and efficiency, while imposing a bureaucratic, union-mediated process on all employer-employee relations that is expensive, time-consuming, and morale-sapping--for both sides. A better, though perhaps unlikely, outcome would have been scrapping plant-level work rules in favor of the more flexible approach taken at New United Motor Manufacturing (NUMMI), a Toyota and General Motors joint venture in California that regularly wins awards for its innovation and productivity. That approach is based on the one used at all of Toyota's facilities and is similar to those employed by other transplant automakers. This shortcoming alone leaves Chrysler, and almost certainly General Motors under its forthcoming agreement, at a major competitive disadvantage.

Also detrimental to General Motors and Chrysler is the difficulty that they will have accessing capital and debt markets. Lenders know how to deal with bankruptcy--it's a well understood risk of doing business. But the tough measures employed by the Obama Administration to cram down debt on behalf of the automakers were unprecedented and will naturally make lenders reluctant to do business with these companies, for fear they could suffer the same fate.[2] Even secured and senior creditors, those who forgo higher interest rates to protect themselves against risks, suffered large, unexpected losses. So nothing that either company can offer, no special status or security measure, can fully assuage lenders' fears that, in an economic downturn, they could be forced to accept far less than the true value of their holdings. At best, if General Motors and Chrysler have access to debt markets at all, they will have to pay dearly for the privilege. At worst, even high rates and tough covenants will not be enough to attract interest.

Impaired access to debt and capital will stymie future restructuring, investment, and growth, reducing the likelihood that either company will fully rebound and, beyond that, prosper. There is the risk that this will lead to further government intervention, using taxpayer funds; rather than the lender of last resort, the federal government could become the first, and only, option.

Finally, there is the stigma of having accepted government funds. For months, auto executives asserted that consumers would not purchase cars manufactured by a company in bankruptcy. Poll after poll, however, showed that fear to be overblown, especially as consumers came to know more about the restructuring process. Meanwhile, as auto sales plummeted, General Motors and Chrysler lost the most, as Ford, the holdout, snatched their market share. There is a stigma to taking taxpayer dollars that, according to polls, is far worse than any attached to filing for bankruptcy. Fully 72 percent of those surveyed nationwide say they are more likely to purchase a Ford product because the company has not taken government money.[3] A Rasmussen poll found that 88 percent of Americans would prefer to buy a car from an automaker not receiving government aid.[4] And many articles published in newspapers and online have quoted individuals once devoted to GM brands or Chrysler (known as "Mopar" fans, after the company's auto-parts division) whose loyalty is now defunct--or shifted to Ford.

These downsides prove--as much as is possible at this time--that aggressive government intervention has had a negative effect on both Chrysler and General Motors, relative to the usual alternative, a regular bankruptcy, even one with some degree of debtor-in-possession financing provided by or (even better) merely guaranteed by the federal government. There is every reason to believe that unexceptional bankruptcies, though taking longer and demanding greater sacrifice, would have left both companies on firmer competitive footing. But for mostly political reasons, that is not what the Obama Administration chose to do. That it chose, however, to rely on portions of the bankruptcy code to implement its bailout plan raises concerns that it may have, in the process, altered that body of law.

Specifically, the Obama Administration's abuse of bankruptcy to carry out its initiatives could serve as a precedent for others to sidestep the requirements of the Chapter 11 reorganization process, thereby undermining what has been an extraordinarily successful tool to turn around troubled enterprises.

America's Chapter 11 process has been a model for the rest of the world. As one recent article describes, China's new bankruptcy law, its first, allows for reorganization of insolvent businesses and the "cramdown" of their debts, very closely tracking the U.S. model.[5]

Its success can also be judged in statistical terms. A recent article from Elizabeth Warren and Jay Lawrence Westbrook analyzes data from thousands of bankruptcy cases involving both small and large businesses.[6] They found that, among companies that, entering bankruptcy, had a plausible chance of reorganizing, between 65 percent and 72 percent were able to confirm a reorganization plan to exit bankruptcy.[7] And the rate is likely higher for larger firms.[8] This is an encouraging statistic, considering that all of these businesses had reached the point of insolvency or illiquidity at the time that they entered bankruptcy.

Warren and Westbrook also found that bankruptcy proceeds at a quick pace in most cases; the typical case is resolved in about 9 months.[9] While firm size is a factor, larger businesses only took an average of 4 months longer than smaller businesses.[10] And by 24 months, they report, nearly all cases were resolved.[11]

They summarize their findings thusly:

These data expose the heart of the efficiency question: is successful reorganization a rarity, available in a relatively small number of cases? Are the benefits of Chapter 11 achieved only at the expense of long delays? Our data...show that confirmation rates jumped to two-thirds or more among larger debtors, debtors that were able to survive the first nine months in bankruptcy, and debtors who at least proposed a plan to reorganize. The data reveal that the cases--both those that exit the system and those that confirm plans of reorganization--moved at a lively pace.

Those conclusions, however, describe a system that is premised on maximizing the value of an enterprise for (in the case of insolvency) the benefit of its creditors, who wield great control over the process. That is the system that the Obama Administration opted to circumvent.

In a normal case, a business files for bankruptcy and then has an "exclusivity period" of up to 18 months during which it can prepare a reorganization plan to present to its creditors. That plan, under Section 1129 of the Bankruptcy Code, must adhere to the "absolute priority rule," which simply mandates that senior creditors, such as those with security interests (like a mortgage or a car loan), are paid off before junior creditors. Further, creditors who, under the plan, are not paid in full and are slated to receive less than they would in a Chapter 7 liquidation--that is, when the assets of the business are sold off--have a chance to vote, as a class, on whether to accept or reject it.

Taken together, these rules protect creditors' contractual rights and ensure that bankruptcy law is used to promote economic efficiency, rather than for more nefarious purposes, such as enriching favored creditors at the expense of others. This is important because, within bankruptcy, a business has extraordinary power to accept or reject contracts, alter the terms of its debt, and even dismiss debt altogether. Without these rules, bankruptcy could easily be misused to defraud lenders and other creditors.

But Chrysler, which filed for bankruptcy on April 30, will never file a plan subject to the approval of impaired creditors. Though it is taking advantage of bankruptcy to exit contracts, such as with some dealers, and cram down its debt, it gets to skip the requirements of Chapter 11 reorganization thanks to a combination of aggressive lawyering, coercion, and intimidation, all courtesy of the Obama Administration.

The means to evading the law is a provision of the Bankruptcy Code, Section 363(b), which allows the sale of assets of the bankruptcy estate. Relying on that provision, the government arranged a sham sale of nearly the entire company to a newly created "Chrysler" capitalized by the government. The price? $2 billion, all of which would go to secured creditors for senior debt worth $6.9 billion, for a recovery of just 29 cents on the dollar. Meanwhile, one junior debtor, the UAW-administered VEBA, was slated to receive 43 cents on the dollar for its unsecured $11 billion claim, as well as 55 percent of the new Chrysler. In a typical case where senior debt-holders were not paid in full, the UAW, along with other junior creditors, would receive nothing.

In effect, the Administration used Section 363(b) to accomplish a sub rosa reorganization of Chrysler, financed in part by Chrysler's former senior debtors. It then transferred a large portion of that value, along with added value from additional bailout funds, to the UAW and Fiat, which is investing some technology, but no money, in its new joint venture with Chrysler.

This is exactly the kind of abuse--stealing from one party to give to another--that the bankruptcy code was designed to prevent.

This is not the first time that Section 363(b) has been used to sell essentially an entire company or its "crown jewel" assets, though it is certainly the most prominent. Courts have been justifiably wary of the practice and carefully scrutinized transactions to ensure that the law was not being abused. In an early case employing this legal "innovation," the Fifth Circuit rejected it outright, writing:

[T]he district court was not authorized by Sec. 363(b) to approve the [transaction]. In any future attempts to specify the terms whereby a reorganization plan is to be adopted, the parties and the district court must scale the hurdles erected in Chapter 11. See e.g. 11 U.S.C. Sec. 1125 (disclosure requirements); id. Sec. 1126 (voting); id. Sec. 1129(a)(7) (best interest of creditors test); id. Sec. 1129(b)(2)(B) (absolute priority rule). Were this transaction approved, and considering the properties proposed to be transferred, little would remain save fixed based equipment and little prospect or occasion for further reorganization. These considerations reinforce our view that this is in fact a reorganization.[12]

A more recent case stated the concern with Section 363(b) sales even more plainly: "The reason sub rosa plans are prohibited is based on a fear that a debtor-in-possession will enter into transactions that will, in effect, short circuit the requirements of Chapter 11 for confirmation of a reorganization plan."[13] That court went on to state:

[W]hether a particular settlement's distribution scheme complies with the Code's priority scheme must be the most important factor for the bankruptcy court to consider when determining whether a settlement is "fair and equitable" under Rule 9019 [concerning the settlement of controversies within classes]. The court must be certain that parties to a settlement have not employed a settlement as a means to avoid the priority strictures of the Bankruptcy Code.

Any court examining the Chrysler transaction would be compelled to reach the opposite conclusion. It is difficult to argue that what Chrysler is undergoing at present is not a reorganization. The Treasury, in fact, refers to the transaction as a "restructuring initiative" and to the new shell company as "the reorganized Chrysler."[14] Further, it describes the time period after the transaction as part of a "restructuring period."[15] Even more clearly, the transaction, unlike a sale to an established entity such as another company, had no economic substance. Finally, the distribution is hardly "fair and equitable;" it upends the Code's priority scheme, with junior creditors faring better than those holding senior claims.

In short, the entire point of using Section 363(b) was to force a very unfavorable plan on (understandably) recalcitrant secured creditors in violation of their contractual and property rights.

Lawyers justified the sale using much the same language as was employed in support of the Section 363(b) sale of Lehman Brother's brokerage unit, just after its parent had filed for bankruptcy, to Barclays Capital. They argued that Chrysler would precipitously decline in value, wreaking havoc throughout the supplier base, and that only a quick sale could prevent that end. Unlike in the case of Lehman, however, there was little evidence to support this claim, just hand-waving.

Under the Bankruptcy Code, creditors can object to a proposed sale. But reminiscent of the Sherlock Holmes tale about "the dog that didn't bark," banks that held the bulk of Chrysler's senior debt, and that were also TARP recipients and so subject to close scrutiny and regulation by the Treasury, declined to do so. Though an anonymous Administration aide told reporters that the White House forbade the use of TARP as leverage over these banks, other creditors saw early on in negotiations that TARP recipients were more willing than non-TARP parties to cut a deal on unfavorable terms.[16] The implication is that, whether they were explicitly ordered to or not, these banks were coerced into supporting the government-backed proposal.

And there were threats, too, after about 20 creditors banded together to form the "Chrysler Non-TARP Lenders Group" and challenge the Section 363(b) sale. This was just days after President Obama had put pressure on those who had rejected the Administration's previous offer, publicly blaming "investment firms and hedge funds" for Chrysler's bankruptcy, claiming that by rejecting the government's deal, they had "decided to hold out for...a taxpayer-funded bailout" and were "hoping that everybody else would make sacrifices, and they would have to make none."[17] (In reality, the hold-outs had offered a compromise plan under which they would receive 60 cents on the dollar, about the same as the UAW.) The group, representing teachers unions, pension funds, and school endowments, among others, moved to delay the sale, and the judge agreed to hold a hearing. But the effort would quickly fizzle, as members deserted the group in the face of death threats, criticism from lawmakers, and according to one prominent attorney, threats from the administration:

One of my clients," [attorney Tom ] Lauria told [radio] host Frank Beckmann, "was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight."[18]

After suffering days of abuse, the group folded, ending the leading objection to the sale.[19]

According to news reports, General Motors will follow a similar course at the end of this month, with an anticipated Section 363(b) sale to a new entity that would initially be owned by the federal government.[20] Secured lenders would be paid 28 cents on the dollar, while holders of the company's $27 billion in unsecured bonds would receive a 10 percent stake in the new company. The UAW, meanwhile, would receive $10 billion in cash and up to a 39 percent stake in the "new" General Motors in exchange for its $20 billion in unsecured debt--a far better payout than those to secured lenders and similarly situated bond holders. The government is also expected to take a big ownership stake.

These high-profile precedents threaten to change the nature of bankruptcy for businesses carrying heavy debt loads. Professor Mark Roe, of Harvard Law School, described this risk in a recent column:

f the current deal becomes a strong bankruptcy court precedent, it'd throw priorities into question generally, because the tactics are easily imitated even without the government as the major player. In Chapter 11 reorganizations going forward, if a coalition of creditors and insiders can convince a judge to use the same structure as the Chrysler judge has provisionally approved, they can freeze out a creditor group who then couldn't call on any of bankruptcy law's normal protections.[21]

Insiders alone, as well, might wish to take advantage of this technique to keep their hold on the business, while dropping debt. Rather than persevere the rigor and discipline of the current bankruptcy system, and its inconvenient insistence on fair treatment of creditors, businesses will have another option: arrange a sham sale to a shell company, wiping out debts and other obligations in the process.

If this practice becomes more prevalent, it threatens to disrupt both lending and capital investment across the economy. This consequence is discussed further below.

Just as bad, it promises poor results. Businesses will be washed of their debt, but without realizing the efficiency gains of a real, profits-focused reorganization. Managers regularly overestimate their ability to turn around a failing business, and creditor control in bankruptcy provides an important check on this tendency. Cutting creditors out of the picture will only lead to more business failures, as firms opt to take the easy way out.

Congress should, the next time it takes up bankruptcy reform, study the use, or misuse, of Section 363(b) sales to evade the requirements of the bankruptcy code and frustrate the principles of fairness and rule of law on which it is premised.

It is appropriate here to discuss the rule of law, because in rescuing Chrysler and General Motors, the federal government has trampled it in ways that will hurt our economy.

The "rule of law" means clear, generally applicable laws by which individuals can organize their affairs and which are applied consistently, without respect to status. This was something that the Framers of the U.S. Constitution took very seriously. In three separate clauses of the Constitution--the Contracts Clause, the prohibition on bills of attainder (i.e., legislation that punishes particular individuals, as if they had been convicted of a crime), and the prohibition on ex post facto laws (i.e., criminal laws that apply retroactively)--they sought to limit the power of the government they were creating and of the states to intervene in lawful conduct.

James Madison, for one, understood that the temptation to do so would be irresistible otherwise. His explanation in Federalist No. 44 is worth repeating:

Our own experience has taught us, nevertheless, that additional fences against these dangers ought not to be omitted. Very properly, therefore, have the convention added this constitutional bulwark in favor of personal security and private rights; and I am much deceived if they have not, in so doing, as faithfully consulted the genuine sentiments as the undoubted interests of their constituents. The sober people of America are weary of the fluctuating policy which has directed the public councils. They have seen with regret and indignation that sudden changes and legislative interferences, in cases affecting personal rights, become jobs in the hands of enterprising and influential speculators, and snares to the more-industrious and less informed part of the community. They have seen, too, that one legislative interference is but the first link of a long chain of repetitions, every subsequent interference being naturally produced by the effects of the preceding. They very rightly infer, therefore, that some thorough reform is wanting, which will banish speculations on public measures, inspire a general prudence and industry, and give a regular course to the business of society.

In this view, the consistent application of law is the assumption behind every other clause of the Constitution, the principle, without which, none life, liberty, and the pursuit of happiness could be secure. It is, thus, a prerequisite to due process and protection against the arbitrary exercise of power--that is, tyranny.

When the rule of law is cast aside, for whatever seemingly pragmatic reason, it impairs the machinery of private ordering, such as contractual rights, that are at the core of our economic freedom and prosperity. The broad enforceability of contracts, tempered by several narrow doctrines of abrogation, makes it possible to conduct economic affairs with strong assurance that other parties will keep their promises or be held liable for failing to do so. In this way, people are able to order their affairs, in employment contracts, insurance contracts, service agreements, and the myriad of other contractual agreements that make modern life possible.

Striking down contractual rights arbitrarily, merely because they are inconvenient or expensive to the government, raises the costs of making and enforcing agreements across the economy by reducing the certainty of all agreements. Madison himself described the slippery slope that would result: The more the legislative or executive branch interferes in private affairs, the more who will demand that it interfere in their affairs, to their advantage, and the less the role private agreements will play in economic life. It is, in effect, a tax on contracting, for more contracts will require a lawyer's hand in drafting to avoid government abrogation. And where that is unavoidable, parties may decline to contract at all, costing the U.S. economy the surplus of their avoided transaction, while others may alter the terms of their agreements to reduce risk but also reward. Still others may shift their business to foreign shores that show greater respect for the rule of law.

We can predict who will suffer these consequences. The automakers, surely, will have only limited access to financial markets for years to come and pay usurious rates when they are able to borrow. Sadly, Ford will probably suffer the same fate, if to a slightly lesser degree, because the mere fact of its present solvency is not enough to guarantee that lenders' rights will not be gutted at some point in the future.

Quite perversely--or quite appropriately, depending on one's point of view--unionized industries may also see their cost of capital rise, hampering growth and hiring. The Obama Administration's transparent favoritism toward its political supporters in the United Auto Workers Union may lead other unions to demand the same: hefty payouts and ownership stakes in exchange for halfhearted concessions. Lenders know now that the Administration is unable to resist such entreaties. As one hedge fund manager observed, "The obvious [lesson] is: Don't lend to a company with big legacy liabilities, or demand a much higher rate of interest because you may be leapfrogged in bankruptcy."[22]

Perhaps the most affected will be faltering corporations and those undergoing reorganization--that is, the enterprises with the greatest need for capital. Lending money to a nearly insolvent company is risky enough, but that risk is magnified when bankruptcy ceases to recognize priorities or recognize valid liens. With private capital unavailable, larger corporations in dire straits will turn to the government for aid--more bailouts--or collapse due to undercapitalization, at an enormous cost to the economy. As Warren Buffet opined, "f priorities don't mean anything that's going to disrupt lending practices in the future."[23]

Professor Todd Zywicki offers an observation on this point: "Mr. Obama may have helped save the jobs of thousands of union workers whose dues, in part, engineered his election. But what about the untold number of job losses in the future caused by trampling the sanctity of contracts today?"[24]

Financial institutions--enterprises that the federal government has already spent billions to strengthen--will also be affected. Many hold debt in domestic corporations that could be subject to government rescue, rendering their obligations uncertain. It is that uncertainty which transforms loans into impossible-to-value toxic assets and blows holes in balance sheets across the economy.

Finally, there are the investors, from pension funds and school endowments to families building nest eggs for their future. General Motors bonds, like the debt of other long-lived corporations, has been long regarded as a refuge from the turmoil of equity markets. The once-safe investment held directly by millions of individuals and indirectly, though funds and pensions, by far more, are now at risk, which will be reflected in those assets' values.

The effects of abrogating the rule of law are broad and deep. They can be witnessed first-hand in any nation where contracts are unenforceable and the government's rule is arbitrary and absolute. They are also evident in the prosperity of nations:

[Economists Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert Vishny (LLSV)] documented empirically that legal rules protecting investors vary systematically among legal traditions or origins, with the laws of common law countries (originating in English law) being more protective of outside investors than the laws of civil law (originating in Roman law) and particularly French civil law countries. LLSV then used legal origins of commercial laws as an instrument for legal rules in a two stage procedure, where the second stage explained financial development. The evidence showed that legal investor protection is a strong predictor of financial development.[25]

Empirical studies also show that the rule of law has an impact on civil society, affecting such disparate variables as entrepreneurship, military conscription, and government control of the media.[26]

In sum, continued disregard of this fundamental principle threatens severe consequences.

This episode of lawlessness began with legislation, the Emergency Economic Stabilization Act, that many at the time recognized as an illegally unbounded delegation of power from the legislative to the executive branch.[27] It was that act which created the TARP that is now the Administration's slush fund for bailing out its allies and otherwise upsetting economic expectations.[28] That outcome should be no surprise; unbridled discretion breeds unchecked power.

What began with Congress can end with it, too. It is time to stop the economic adventurism that marked the last months of George W. Bush's Administration and the first of President Obama's. The bankruptcies of Chrysler and soon General Motors are a microcosm of the lawlessness that threatens our freedom and our prosperity. With its legislative power, Congress can put an end to the bailouts and begin the slow process of unwinding those that entangle us today.

[2] There is some evidence that this is already happening. See, e.g., Eric Berman, State to No Longer Invest in Federal Bailout Recipients, WIBC News, May 20, 2009, http://www.wibc.com/news/Story.aspx?ID=1094872 (describing how Indiana's State Treasurer ordered the managers of the state's investment funds, such as pensions, "not to buy any more bonds from Chrysler, GM, or banks covered by the bailout").

[13]In re Iridium Operating LLC, 478 F.3d 452, 466 (2nd Cir. 2007) (internal quotations omitted). The court approved the sale in this case only after it found that the transaction "had a proper business justification and was a step towards possible confirmation of a plan of reorganization and not an evasion of the plan confirmation process." Id.

[19] One challenge, though, is still pending. The Indiana State Teachers Retirement Fund, Indiana State Police Pension Trust, and Indiana Major Movers Construction Fund have asked the bankruptcy judge to block the sale, arguing that it is "illegal and tramples their rights," nothing more than a scheme to reward creditors the "government deems politically important." Objection of Indiana Pensioners, In Re Chrysler, No. 09-50002 (Br. S.D. N.Y. May 19, 2009), available at http://chapter11.epiqsystems.com/viewdocument.aspx?DocumentPk=8b2f9a28-04cd-4161-b3b6-50fc8e37ef9c.

What Are We Stimulating?The stimulus will do nothing for the economy, but it will advance the cause of statism.

By Mark Steyn

I was in Vermont the other day and made the mistake of picking up the local paper. Impressively, it contained a quarter-page ad, a rare sight these days. The rest of the page was made up by in-house promotions for the advertising department’s special offer on yard-sale announcements, etc. But the one real advertisement was from something called SEVCA. SEVCA is a “non-profit agency,” just like the New York Times, General Motors, and the State of California. And it stands for “South-Eastern Vermont Community Action.”

Why, they’re “community organizers,” just like the president! The designated “anti-poverty agency” is taking out quarter-page ads in every local paper is because they’re “seeking applicants for several positions funded in full or part by the American Recovery & Reinvestment Act (ARRA)” — that’s the “stimulus” to you and me. Isn’t it great to see those bazillions of stimulus dollars already out there stimulating the economy? Creating lots of new jobs at SEVCA, in order to fulfill the president’s promise to “create or keep” 2.5 million jobs. At SEVCA, he’s not just keeping all the existing ones, but creating new ones, too. Of the eight new positions advertised, the first is:

“ARRA Projects Coordinator.”

Gotcha. So the first new job created by the stimulus is a job “coordinating” other programs funded by the stimulus. What’s next?

“Grantwriter.”

That’s how they spell it. Like in Star Wars — Luke Grantwriter waving his hope saber as instructed by his mentor Obi-Bam Baracki (“May the Funds be with you!”). The Grantwriter will be responsible for writing grant applications “to augment ARRA funds.” So the second new job created by stimulus funding funds someone to petition for additional funding for projects funded by the stimulus.

The third job is a “Marketing Specialist” to increase “public awareness of ARRA-funded services.” Rural Vermont’s economy is set for a serious big-time boom: The critical stimulus-promotion industry, stimulus-coordination industry, and stimulus-supplementary-funding industry are growing at an unprecedented rate. The way things are going we’ll soon need a Stimulus-Coordination Industry Task Force and Impact Study Group. By the way, these jobs aren’t for everyone. “Knowledge of ARRA” is required. So if, say, you’re the average United States senator who voted for ARRA without bothering to read it, you’re not qualified for a job as an ARRA Grantwriter.

I don’t want to give the impression that every job funded by the stimulus is a job coordinating the public awareness of programs for grant applications to coordinate the funding of public awareness coordination programs funded by the stimulus. SEVCA is also advertising for a “Job Readiness Program Coordinator.” This is a job coordinating the program that gets people ready to get a job. For example, it occurred to me, after reading the ad, that I might like to be a “Job Readiness Program Coordinator.” But am I ready for it? Increasing numbers of us are hopelessly unready for jobs. Ever since last November, many Americans have been ready for free health care, free daycare, free college, free mortgages — and, once you get a taste for that, it’s hardly surprising you’re not ready for gainful employment. I only hope there are enough qualified “Job Readiness Program Coordinators” out there, and that they don’t have to initiate a Job Readiness Program Coordinator Readiness Program. As the old novelty song once wondered, “Who Takes Care of the Caretaker’s Daughter While the Caretaker’s Busy Taking Care?” Who coordinates programs for the Job Readiness Program Coordinator while the Job Readiness Program Coordinator’s busy readying for his job? If you hum it, I’ll put in for the stimulus funding.

Oh, and let’s not forget the new job of “VITA Program Coordinator.” VITA? That’s “Volunteer Income Tax Assistance.” It’s an IRS program designed “to help low and moderate-income taxpayers complete their tax returns at no cost.” The words “no cost,” by the way, are used in the new Webster’s–defined sense of “massive public expenditure.” Whoops, I mean massive public “investment.” You might think, were you a space alien recently landed from Planet Zongo, that, if tax returns are so complicated that “low and moderate-income taxpayers” have difficulty filling them in, the obvious solution would be to make the tax code less complex. But that’s just the unfamiliar atmosphere on Planet Earth making you lighthearted and prone to cockamamie out-of-this-world fancies. Put in for a Job Readiness Program, and you’ll soon get with the program.

Of course, it’s not just “low and moderate-income taxpayers” who have difficulty completing their tax returns. So do high-income taxpayers like Treasury secretary Timothy Geithner. Tragically, they’re ineligible for the “Volunteer Income Tax Assistance” program. Indeed, the Treasury secretary seemed under the misapprehension that it was a “Volunteer Income Tax” program, which would be a much better idea. But, being ineligible for VITA, Secretary Geithner was forced to splash out $49.95 for TurboTax and, simply by accidentally checking the “No” box instead of “Yes” at selected moments, was able to save himself thousands of dollars in confiscatory taxation! Oops, my mistake, I meant that, tragically, by being unable to complete his tax return due to a lack of Volunteer Income Tax Assistance, Timothy Geithner was the only one of 300 million Americans to pass the Treasury Secretary Job Readiness Program.

SEVCA serves two rural counties with a combined total of a little over 40,000 households. If you wanted to stimulate the economy, you’d take every dime allocated to Windsor and Windham counties under ARRA and divide it between those households. But, if you want to stimulate bureaucracy, dependency, and the metastasization of approved quasi-governmental interest-group monopolies as the defining features of American life, then ARRA is the way to go. Oh, you scoff: ARRA, go on, you’re only joking. I wish I were. We’re spending trillions we don’t have to create government programs to coordinate the application for funds to create more programs to spend even more trillions we don’t have.

The stimulus will do nothing for the economy, but it will dramatically advance the cause of statism (as Mark Levin rightly calls it). Last week’s vote in California is a snapshot of where this leads: The gangster regime in Sacramento is an alliance between a corrupt and/or craven political class wholly owned by a public-sector union-bureaucracy extortion racket. So what if the formerly Golden State goes belly up? They’ll pass the buck to Washington, and those of us in non-profligate jurisdictions will get stuck with the tab. At some point, the dwindling band of citizens still foolish enough to earn a living by making things, selling things, or providing services other than government-funded program coordination will have to vote against not just taxes but specific agencies and programs — hundreds and thousands of them.

The bad news is our children will not enjoy the American Dream. The good news is they’ll be able to apply for an American Dream Readiness Assistance Coordination Grantwriter Program. May the Funds be with you!

Like a troubled bank, President Obama is overleveraged. When a bank makes risky loans and many of them default, the bank goes bankrupt (or gets bailed out). When a first-term president adopts risky policies and many of them fail, his prospects for sustained public approval and reelection diminish.

One of Obama's policies--the decision to close the Guantánamo prison within a year--has already gotten him in a jam. He has no plan for relocating most of the 241 detainees, and Congress refuses to fund the shutdown until he produces one. Both Congress and the public oppose transferring the prisoners to jails on American soil.

The president's distress was reflected last week in a speech in which he blamed the Bush administration for what he called the Guantánamo "mess." He said captured terrorists should never have been sent to Guantánamo, but he offered no alternative of what should have been done with them. Obama also denounced Bush officials for using tough interrogation tactics such as waterboarding to get information from terrorists. But a new poll by Whit Ayres for Resurgent Republic found a majority of Americans disagree with Obama and believe the tactics were justified.

So Obama, like a banker who made a bad loan, is confronted with a problem of his own making. The president said Bush acted too hastily in setting up Guantánamo. But Obama's announcement, two days after his inauguration, of a deadline for closing Guantánamo was a rash decision made in even greater haste.

Most presidents propose two or three risky policies in their first year--risky because there's a significant chance of failure to deliver what's promised. In 1981, President Reagan's policies of deep cuts in taxes and spending and aggressively confronting the Soviet Union were dicey. But the economy rebounded 18 months later and the Soviets buckled, though not until Reagan's second term.

Obama has outdone Reagan or any president since Lyndon Johnson, perhaps even since FDR, in risk-taking. He's adopted or proposed eight or nine risky policies (by my count). Re-election doesn't require all of them to succeed. If his policies bring about a briskly growing economy and nothing more, that may be sufficient for Obama to win a second White House term.

The president has been criticized for trying to do too much in his first year rather than focusing on a few important issues. But the size of Obama's agenda is less of a problem than the likelihood that much of it will be enacted, given the large Democratic majorities in the Senate and House.

The difficulty is that some of his policies are likely to hinder others. Tax hikes, increased energy costs, and new regulations work against the economic recovery that soaring spending and peacetime deficits at historic highs are supposed (by Obama at least) to spur. A more likely result: stagflation, a simultaneous surge in inflation and interest rates.

Obama is now trying to deleverage. The purpose of his speech last week was to take the risk--or at least the appearance of risk--out of his policy on Guantánamo and terrorists. He insisted the safety of Americans would never be put in jeopardy by the release of prisoners from Guantánamo or their transfer to prisons in this country.

In his appearance with Israeli prime minister Benjamin Netanyahu, Obama toughened his policy toward Iran. His position, a risky one, had been that friendly diplomacy is the best policy for persuading the Iranians to abandon their effort to build nuclear weapons. But Obama indicated he'd turn to stronger measures if the Iranians haven't responded favorably by the end of 2009.

Obama has set "energy independence" as a goal. But his policies make that goal harder to achieve. His administration has refused to open new areas in the United States and offshore for oil exploration and production. It favors lavish subsidies for renewable energy (wind, solar) that will do little in the foreseeble future to make up for the shortfall in domestic production of gasoline. As the demand for gasoline increases, as it almost certainly will, there will be only one place to turn: foreign oil.

His takeover of the Big 2 in Detroit, General Motors and Chrysler, poses another risk: downright failure. The auto companies are a money pit, requiring tens of billions in federal subsidies just to stay alive. The public opposes the continued bailout of the auto companies, but Obama is stuck with it. And the chance that either company will soon return to profitability is slim.

Taken together, Obama's policies on energy, health care, and financial institutions are risky for still another reason. They require more government control of the economy, which leads inevitably to a less dynamic and innovative economy and to less growth.

The raft of new regulations should have the same effect. Obama's crackdown on the credit card industry may be justified on ethical grounds. But there's a simple economic fact that applies here: The more you regulate something, the less you get of it. Though more credit is critical to reviving the economy, the new regulations mean we'll get less of it.

Obama is also a fan of labor unions. Through card check or whatever else it takes, Obama wants unionization of the workforce to grow. This, too, is risky. Unionization leads to higher wages for union workers but fewer jobs for everyone else. For Obama, the best outcome in 2009 is counterintuitive. The fewer of his risky initiatives that pass--in effect deleveraging his agenda--the better for the economy, and the better for him politically.

A tipster alerted me to an interesting assertion. A cursory review by that person showed that many of the Chrysler dealers on the closing list were heavy Republican donors.

To quickly review the situation, I took all dealer owners whose names appeared more than once in the list. And, of those who contributed to political campaigns, every single one had donated almost exclusively to GOP candidates. While this isn't an exhaustive review, it does have some ominous implications if it can be verified.

However, I also found additional research online at Scribd (author unknown), which also appears to point to a highly partisan decision-making process.

Consider the partial list of Chrysler dealership owners, listed below. You'll notice that all were opponents of Barack Obama, most through sponsorship of GOP candidates and organizations, but a handful through Barack's Democrat rivals (Hillary Clinton and John Edwards in 2008, for example).

• Vernon G. Buchanan: $147,450 to GOP candidates and organizations• Wallace D. Alley and Family: $4,500 to GOP.• Robert Archer: $4,600 to GOP and conservative causes.• Homer S. Higginbotham and Family: $2950 to GOP.• James Auffenberg and Family: $28,000 to GOP; $6,000 to one Democrat candidate.• Michael Maroone and Family: $60,000 to GOP; $8,500 to two Democrat candidates.• Jerome Fader: $6,500 to Democrats; $2,500 to Independent Joe Lieberman.• Stephen Fay and Family: $13,500 to GOP.• William Numrich: $20,000 to GOP.• Robert Carver: $10,000 to Democrats including $1,950 to Hillary Clinton, nothing to Barack Obama.

I have thus far found only a single Obama donor (and a minor one at that: $200 from Jeffrey Hunter of Waco, Texas) on the closing list.

Chrysler claimed that its formula for determining whether a dealership should close or not included "sales volume, customer service scores, local market share and average household income in the immediate area."

In fact, there may have been other criteria involved: politics may have played a part. If this data can be validated, it would appear to be further proof that the Obama administration is willing to step over any line to advance its agenda.

It bodes poorly for America and the rule of law.

Update: Noteworthy comments from Cars.com's blogs:

As an employee of one of the affected dealerships... First, this isn't just Chrysler's decision. They were forced into bankruptcy by President Obama. When Chrysler emerges from bankruptcy the Federal Government will be a junior partner in the new Chrysler. This is SOCIALISM! Wake up people! This isn't about business it's about politics and control. My dealership is in the top 125 out of the 3500 plus dealerships nationwide...yet we are on the list. We are not small nor are we rural. We are in a large major metropolitan area. Our new vehicle inventory alone is well over $4.0 million. Is that small? Secondly, Chrysler is already "shopping" for dealers to take over the open "points" (another name for franchise) left by the closed dealerships. Again, you think this is just business. Lastly, and more importantly, every state has franchise law in affect that protect companies from this very thing - being forced out of business under the cloak of bankruptcy with out the benefit of due process. This is illegal!

This is so much more than "just business". This is about control and power by our present administration in Washington. An administration that will stop at nothing to bring complete Socialism to this once great country. Wake up people or get in line now to "drink the Kool-Aid".

I just saw on the list that my local dealership, Wilson Dodge is closing. This is very shocking to me since they are the oldest and most recognized Dodge, Chrysler, Jeep dealer in the metro. This is really sad because these are great people with excellent service...

...There was an interview on the news this evening with the owner of the dealership that is going to be closed in my area where I learned that the DCJ dealership they competed with in my area is factory owned. So, instead of closing their own, they choose to close a successful franchisee. That's #$@?ed up IMO! ...

"I've been around this forever, and there's no rhyme or reason," Fred Barber, owner of Barber Brothers Motors in Spanish Fork, said Thursday.

...Why were Barber's Chrysler dealership and nine others from Utah among the 789 dealerships nationwide singled out by Chrysler LLC, in bankruptcy-court filings, to be eliminated by June 9? Was there any rhyme or reason to why certain dealerships were selected and others not? What's next for the targeted dealerships, and what will be the ripple effects?

"This is as close to socialism as I've seen — we've got the government running the automotive industry," he added.

Jim Lunt, vice president of Lunt Motor Co. in Cedar City, said employees at his Main Street dealership are anxious, while the owners feel "abandoned."

"It's like they chopped out your legs," Lunt said. "We haven't looked at other manufacturers. We've stuck with Chrysler through thick and thin. You kind of feel like you've been thrown overboard."

Michael Bernstein, an attorney with Arnold & Porter who represents the Chrysler National Dealer Council, said the dealers may offer a number of objections to the plan in U.S. bankruptcy court, and that the case will enter some uncharted legal territory.

...Bernstein said under bankruptcy law Chrysler would have to show how its "reasonable exercise of business judgment" led to the closing list. While the company cited a bevy of standards by which it chose dealerships, Bernstein said it was noteworthy that Chrysler didn't cite costs.

"There's no cost to Chrysler associated with dealers. Dealers are a source of revenue," Bernstein said. "A lot of people were surprised by the number of dealers Chrysler is proposing to reject..."

Update IV: For those who want to do a deeper dive, here are the lists of both sets of dealers: those who are being shuttered and those who remain open. I have not had time to investigate the latter list, but welcome any help!

AllPar: Chrysler Dealers to be cut and kept

Please email me with with any conclusions, even preliminary ones, which you can draw from this data.

North Korea's test of a second nuclear device Monday didn't surprise readers who saw John Bolton's recent prediction on these pages. But it does once again put in sharp relief the world's failure to counter dictator Kim Jong Il's challenge to global security. If history is any guide, Kim's strategy is to keep escalating until he extorts more money, aid and global recognition. This time in particular he's testing President Obama and his vow to "engage" the world's rogues.

By early accounts, yesterday's underground test outside the northeastern city of Kilju was successful. If the initial reports of a 10 to 20 kiloton blast are true, then North Korea's scientists have come a long way since their first test in October 2006. That blast registered less than a kiloton and was widely considered a failure abroad, if not in the North, where Kim used it to bolster his prestige.

In response to that test, the Bush Administration and China at first increased sanctions and diplomatic pressure. But they quickly turned to strike a deal offering Pyongyang aid and recognition in return for the North's promise to dismantle its nuclear programs. The North and the U.S. later made a public-relations show of blowing up the cooling towers at the Yongbyon reactor, but the deal foundered over the North's refusal to allow adequate inspections, turn over its plutonium or acknowledge its clandestine uranium program. President Bush nonetheless removed North Korea from the U.S. list of terror-sponsoring nations.

Kim is returning to this playbook now that Mr. Obama is in the White House, and Kim can't be displeased with the reaction so far. After the North launched a long-range ballistic missile in April, Mr. Obama declared that "Rules must be binding. Violations must be punished. Words must mean something. The world must stand together to prevent the spread of these weapons. Now is the time for a strong international response." But the U.S. couldn't even get a Security Council resolution at the U.N. and had to settle for a nonbinding "presidential statement" of rebuke.

After Pyongyang said it would put two American journalists on trial in June, Secretary of State Hillary Clinton said there was an "open door" to talks. And when the North refused to return to the six-party nuclear talks, Presidential envoy Stephen Bosworth said the U.S. is "committed to dialogue." Monday's test brought more global tut-tutting, with the White House saying that "such provocations will only serve to deepen North Korea's isolation." But Kim Jong Il can be forgiven for concluding that his multiple violations will sooner be rewarded than punished.

We can already hear the response in world capitals that there is "no alternative" to this kind of policy accommodation. That's what senior Bush State Department officials like Philip Zelikow, Christopher Hill and Condoleezza Rice asserted to win over Mr. Bush. But a concerted effort to squeeze North Korea economically was making a difference before Mr. Bush pulled the plug in 2007.

In 2005, the U.S. Treasury took action against a bank in Macau that did business with North Korea, and Japan cracked down on illegal businesses sending cash to the North. Those financial sanctions could be resumed, and if backed by energy sanctions from China would get the North's attention in a way that U.N. resolutions never will. The U.S. also has a reliable South Korean ally in President Lee Myung-bak, who has cut off aid to the North amid its recent provocations.

The stakes here go beyond the ambitions of one nasty regime. North Korea has shown in the past it is willing to sell its missile and other technology around the world, not least to Iran and Syria. The mullahs in Tehran and other rogues are carefully watching the response of the new American President as they contemplate the costs of their own WMD ambitions.

Mr. Obama won the White House while promising that his brand of kinder, gentler diplomacy would better rally the world against bad actors. Now would be a good time, and North Korea the right place, to prove it.

Rick MoranI wrote yesterday of the possibility that Chrysler dealers who had been given the ax were disproportionately Republican - many of them large contributors to GOP candidates and the RNC.

Now comes more evidence that these dealer closings were politically motivated. Through Reliapundit at Astute Bloggers, we learn that the lawyer for the dealers being torpedoed believes that the closings were ordered not by Chrysler, but by the White House: (via Reuters )

Quote

A lawyer for Chrysler dealers facing closure as part of the automaker's bankruptcy reorganization said on Tuesday he believes Chrysler executives do not support a plan to eliminate a quarter of its retail outlets.

Lawyer Leonard Bellavia, of Bellavia Gentile & Associates, who represents some of the terminated dealers, said he deposed Chrysler President Jim Press on Tuesday and came away with the impression that Press did not support the plan.

"It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers," Bellavia said. "It really wasn't Chrysler's decision. They are under enormous pressure from the President's automotive task force."

The dealer closings were not ordered by the bankruptcy judge but by the White House. This puts a whole new light on how the dealers to be closed were chosen and, more importantly, who did it.

And Jim Hoft has found an incredible piece of information. Apparently, a politically connected group of Democrats who own six Chrysler dealerships not only were allowed to keep them, but their competition was deep sixed. Hoft has a link to a blog on the Chrysler dealer shutdowns run by Joey Smith who reports:

Quote

The company is called RLJ-McLarty-Landers, and it operates six Chrysler dealerships throughout the South. All six dealerships are safe from closing. The dealer locations are:

The interesting part is who the three main owners of the company are. The owners are Steve Landers (long-time car dealer, 4th-generation dealer), Thomas "Mack" McLarty (former Chief of Staff for President Clinton), and Robert Johnson (founder of Black Entertainment Television and co-owner of the NBA's Charlotte Bobcats). Landers has given money to Republicans in the past, but McLarty campaigned for Obama in 2008, and Johnson has given countless amounts of money to Democrats over the years.

This thing is getting stinkier by the hour. And it's starting to smell like rotten bananas - as in the tactic the White House is using is something you'd find in a central American banana republic and not the greatest nation on earth.

I wrote a piece on my own blog a while back when Chrysler dealer George Joseph wrote a letter published on AT about his own troubles with being shut down. In that piece, I made the argument that what we were seeing was not socialism, but gangsterism. And how did it happen?

It can happen because we are barking up the wrong tree when we accuse the Democrats of practicing socialism. Any Chicagoan recognizes what's going on as pure gangsterism - the application of power through the use blackmail, threats, and pure muscle and the devil take the Constitution, the rule of law, and simple fairness.

It can happen because we've elected a president who aggrandizes power unto himself while running roughshod over individual rights.

This story is about ready to explode. All the ingredients are there for a gigantic political scandal that would shake the Obama administration to its foundation and perhaps take down several high ranking officials. All that's needed is one connecting piece of evidence that would tie the White House Automotive Task Force to some political arm of the Democratic party.

This story is about ready to explode. All the ingredients are there for a gigantic political scandal that would shake the Obama administration to its foundation and perhaps take down several high ranking officials. All that's needed is one connecting piece of evidence that would tie the White House Automotive Task Force to some political arm of the Democratic party.

Hyperbole aside--I don't edit the source material I post--Bush's Justice Department was excoriated in the press for having introduced ideological assessments into its hiring processes. If BHO and his cronies are now telling automotive bondholders what percentage on the dollar they will be allowed to reclaim, and then closes dealerships with Republican ties while leaving those with Democratic ties relatively unscathed, it's a story that ought to have legs if the MSM was doing its job.

He's no Ronald Reagan. Remember how Reagan got a lot done with *opposition* parties in both houses.

This guy is cruising through with essentially super majorities from the same party and an adoring news media who are of the same party persuasion:

Obama in L.A.: 'You ain't seen nothing yet' By Sam Youngman Posted: 05/27/09 11:51 PM [ET] LOS ANGELES — Even as he conceded there is still much hard work to do, President Obama was in a boastful mood Wednesday night, telling a star-studded crowd at a fundraising dinner that he "would put these first four months up against any prior administration since FDR."

The president, speaking to a dinner that included Hollywood A-listers like Kiefer Sutherland, Marisa Tomei, Jamie Foxx, Ron Howard and Steven Spielberg, lauded the legislation he has signed since taking office but added that he is "not satisfied."

"I'm confident in the future, but I'm not yet content," Obama said.

The celebrity dinner, which cost couples $30,400 to attend, was followed by a larger, lower-dollar concert that all told raised between $3 million and $4 million for the Democratic National Committee (DNC).

Obama was introduced by Dreamworks CEO and longtime Democratic donor Jeffrey Katzenberg. The president thanked Katzenberg, saying: "If it weren't for you, we would not be in the White House."

The trip here came on the heels of a fundraising jaunt to Las Vegas to raise about $2 million for Senate Majority Leader Harry Reid (D-Nev.), according to aides.

The president, while seeking to bolster his record as president so far, warned both audiences that significant challenges lie ahead.

At the concert, headlined by Jennifer Hudson and Earth, Wind and Fire, Obama responded to an audience member yelling, "Yes we can" by saying, "Yes we have. But we've got more work to do. We can't rest on our laurels.

"We didn't ask for the challenges that we face, but we don't shrink from them either," he said. "It won't be easy. There will be setbacks. It will take time."

The president conceded that his administration "had our fits and starts."

"I've made some mistakes, and I guarantee you I'll make some more," he said.

But Obama said in promising to continue to work hard, "Los Angeles, you ain't seen nothing yet."

Obama also lauded Judge Sonia Sotomayor, his pick to replace retiring Supreme Court Justice David Souter, repeating his line that she has more experience than anyone currently sitting on the bench when they were nominated.

He joked at the second fundraiser that she graduated summa cum laude, "not just magna or laude laude, but summa cum laude."